Lifeworld and Systems in the Digital Economy

The digital economy has provided opportunities for new forms of economic practice, forms that entail a very different kind of moral economy than market capitalism. At their purest, these forms deliver economic benefits as gifts and depend on cooperation without authority. Drawing loosely on Habermas, we may call this a lifeworld economy – an economy that is coordinated by communicative interaction – as opposed to the systems economy of market and state, coordinated by money and power. However, the digital lifeworld economy has been colonised steadily by capitalist businesses, which have frequently found ways to incorporate forms of gift and cooperation into profit-oriented business models. This paper asks whether the lifeworld economy can survive in the digital world. Can it coexist with digital capitalism? And if so, how far does its hybridisation with profit-driven forms compromise its ethical value?

We cannot answer such questions within the frameworks of mainstream economics or Marxist political economy. Neither has the capacity to analyse the contemporary economy as a mixture of competing forms of economic practice. Neither has the tools to explain how non-market practices could produce economic benefit. Both marginalist accounts of equilibrium and the labour theory of value lose their purchase when confronted with lifeworld forms. This paper advocates an alternative framework: a political economy of practices.

Once we step outside a purely market model of the economy, we must extend our concept of economic benefits beyond that which is bought and sold. If we are to explain an economy which delivers free Wikipedia articles, for example, then we need to take account of economic forms other than markets. The theory of economic forms as complexes of interacting practices (which come in both market and non-market flavours) provides us with a means to do so. This paper uses it to explain two complexes within the digital economy – Wikipedia and open source software – and to consider the prospects for these complexes and for the lifeworld sector of the digital economy more generally.

Wikipedia is one of the best known and one of the purest forms of gift economy in the digital world. It depends on three interlinked gift practices, the gift of labour by its editors, the gift of money to fund its operating costs and the gift of its product to its users, but also on a set of organisational practices and technologies that structure the product, the process of producing it and the coordination of its production. Wikipedia’s success has been built on a very specific balancing of editorial freedom and community control in its production and coordination processes. That balance is vulnerable to a variety of factors, but it has proven relatively immune so far to pressures from the commercial sector. The biggest challenge it faces in the short term is managing the transition to a somewhat different set of processes as its content becomes more mature.

The open source software sector faces a very different set of issues. In its early incarnations it had a great deal in common with Wikipedia. Like Wikipedia, it depends on both technological and institutional innovations that have provided a framework in which volunteers donate their labour as a gift to help produce a good which is then in turn provided as a gift to anyone who wishes to use it. Like Wikipedia editors, open source coders are largely self-organising in the sense that they choose their own tasks, execute them without supervision, then submit their product to a communal process of further editing and selection. Unlike Wikipedia however, some of the most successful open source communities have largely been taken over by commercial businesses. Linux, in particular, is now coded predominantly by employees of commercial software companies, which have found ways of profiting from this gift, primarily by selling support services to enterprise users of the open source product concerned. Linux has thus become a hybrid of the lifeworld and systems models. It continues to be a free product, with commercial companies and independent coders donating updates to the community, coordinated by a non-profit foundation. Yet the commercial participants have found linked practices that deliver commodity sales and profit, and this affects the directions in which Linux is developed as these sales depend on developing features and fixing problems that are important to the enterprise customers of the developing companies.

Linux is a fascinating case as the arrival of commercial contributors has by no means eliminated all of the lifeworld features of the model, though it does attenuate them. Nor does the commercialisation of Linux necessarily imply a similar outcome for open source products in general. This depends on the commercial software companies anticipating linked revenue opportunities, and so far this in turn depends on the product itself being of significant value to enterprise users. It is therefore likely that the open source model will be able to continue in two different variants: a strongly lifeworld-oriented complex of practices for those products that are of less interest to commercial software companies and a more hybridised complex for others.

While the future remains unpredictable, the implication would seem to be that lifeworld and gift forms of economy remain viable in the digital world, despite the encroachment of profit-oriented forms. The encounter between the two proliferates new hybrids that add to the sheer diversity of forms of digital economy but need not lead to the extinction of lifeworld forms. Both Wikipedia and lifeworld-oriented forms of open source production remain viable. We need to analyse them as complexes of economic practices to see why they are viable and how new challenges might affect them: the old models of economics simply cannot compete in this space.