Digital Distributism
Part II: From Artisans to Employees

By Douglas Rushkoff. Published in Medium on 11 August 2022

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This is the second part of an essay for the Equitable Enterprise Initiative at Institute for the Future. Part I is here.

For a happy couple of centuries before industrialism and the modern era, the business landscape looked something like Burning Man, the famous desert festival for digital artisans. The military campaigns of the Crusades had opened new trade routes throughout Europe and beyond. Soldiers were returning from faraway places after having been exposed to all sorts of new crafts and techniques for building and farming. They even copied a market they had observed in the Middle East — the bazaar — where people could exchange not only their goods but also their ideas, leading to innovations in milling, fabrication, and finance.

The bazaar was a peer-to-peer economy, something along the lines of eBay or Etsy, where attention to human relationships and reputations promoted better business. There was no middleman, no central platform through which exchanges were conducted, except for the appointed time and place of the bazaar itself. Since people transacted back and forth, all sorts of interdependencies developed that in turn fostered more and better commerce. This was a bound community of commerce, where transactions were informed by a multiplicity of values.

Transactions were made with local moneys that often had little value if held. Market moneys were generally issued in the morning, denominated in the value of a local commodity (like a loaf of bread) and expired at the end of the market day if they were not redeemed. There was no such as savings; the money was biased entirely toward transaction. Even money that could be saved, such as grain receipts, lost value over time. The grain house needed to be compensated, and some grain was lost to spoilage. But because the money was biased toward velocity rather than accumulation, it helped distribute prosperity throughout the trading community.

The quality of goods and services was maintained by a system of guilds covering each of the major trades. It wasn’t a perfect scheme, as guilds often favored the children of existing members, but it was characterized less by competition among members than by the standardization of prices, the training of apprentices, and the exchange of best practices. Members of a guild could decide to make a rule, say, to take Sundays off. This would ensure a shorter workweek for all members without putting anyone at a competitive disadvantage.

Thanks to the emergence of the bazaar and its use of market moneys biased for exchange, Europe in the late Middle Ages enjoyed one of the most rapid economic expansions in history. For the first time in many centuries, the economy grew. People ate more, worked less, and became quite healthy — and not just by the standards of that era. The problem was that while the merchant class was gaining wealth, the aristocracy was losing it. Noble families had enjoyed the spoils of feudalism for centuries by passively extracting the value of peasants who worked the land. As the new trading economy grew, however, all this began to change. With many former peasants going into business for themselves, the aristocracy lost its monopoly over value creation.

However, the nobles still had the power to write the law, and in a series of moves that took place in different countries at different times, they taxed the bazaar, broke up the guilds, outlawed local currencies, and bestowed monopoly charters on their favorite merchants. In exchange for stock, kings granted certain companies exclusive control over their industries. The peer-to-peer, or “P2P,” nature of the economy changed — not overnight, but over a couple of centuries — to the top-down economy we know today.

Instead of making and trading, craftspeople had to seek employment from one of the chartered monopolies. Instead of selling their wares, people now sold their hours. Counterintuitively, perhaps, business owners learned to seek out the least qualified workers. A skilled shoemaker might demand pay befitting his expertise. An immigrant seeking day labor could be gotten on the cheap and was easily replaced by another if he protested his hours, conditions, or compensation. But how could a bunch of unskilled workers create a viable product? Welcome to the industrial age.

What we now call industrialization was actually an extension of the aristocracy’s effort to usurp the growth it witnessed in the peasants’ marketplace and to imitate it by other means. Industry was really just the development of manufacturing processes that required less skill from human laborers. Instead of having to learn how to make shoes, each worker could be trained in minutes to do one tiny part of the job. In the long run, many industrial processes have ended up more efficient than production by individual craftspeople, but that’s most often because their total costs are hidden or externalized to others. (The government pays for wars to procure cheap oil and roads to convey mass-produced products, while we all pay for the environmental stresses caused by corporate agriculture, and so on.) Prices may be low, but the costs are high.

Likewise, the invention of monopoly central currency (users of local currencies were jailed or killed) gave the wealthy a way to enrich themselves with nothing but their own money. Anyone who wanted to transact needed to borrow currency from the central treasury, at interest. The fact that they needed to pay back more money than they borrowed is what has embedded the growth mandate into our economy to this day.

In a snapshot, the transition from peer-to-peer, artisanal economic values and mechanisms to those of the industrial age looks something like this:

What’s important to notice is that each industrial innovation diminished the value of one human element after another. Identifiably crafted products, such as the manuscript, gave way to mechanically reproducible ones, such as the printed book. Instead of relating to products through the human who made them, people relate to the brand on the package, and so on. People are disconnected from the value chain. This was by design, even if the intentions behind that design have been submerged and forgotten. Remember, industrialism’s primary intent was to subvert a rising middle class and their peer-to-peer market system. Merchants and craftspeople were creating value from the bottom up and threatening the passively earned income of the aristocracy. The object of the game was to get people out of the way because they create value independently, demand compensation, and value their relationships over their purchases.

The American Revolution was a rebellion not against England so much as the British East India Trading Company dominating commerce in the new world. Colonists were free to grow cotton but had to sell it to the monopoly company at fixed prices. The Company then shipped it back to England where it was processed into fabric and clothes, then shipped it back to America where it was sold back to the colonists. They were not allowed to add value, themselves. The more the Company could exclude others from value creation, the more secure its monopoly and greater its extractive power.

And the game remains the same to this day. In short, it is great economic system for promoting colonialism and expansion. But it is a really bad for maintaining a sustainable economy.

In this way of understanding the story, we can think of central currency as the economic operating system, and the corporation as the software running on top of it. In a sense, this was the first time a group in power went “meta” on the markets, using laws and financialization to control the real markets. It was like the original “Web 2.0”, where instead of doing the actual business, you control the platform on which business takes place — in this case, the financialized economy. The whole economy, which used to be optimized for the creation and exchange of value, was now optimized for the extraction of value.