Open and Free Culture

by Daniel Araya

Executive Summary
This policy proposal examines the application of principles of Open and Free Culture to the expansion of human capabilities in Ecuador. It argues that the rise of “peer production” has set in motion a revolution in the production and consumption of knowledge and information. Indeed, the ideal of Open and Free Culture suggests a balanced interpretation of producers’ rights in which artists and craftsmen are free to use and develop cultural works without restriction. In many ways, Open and Free Culture is about more than culture. It is about enlarging community participation in the design and evolution of sociocultural institutions and practices. This suggests the need for policy and planning that steers cultural production beyond the “exchange value” intrinsic to markets forces. This implies a new a type of culture in which mass participation and artistic collaboration are encouraged through active public policies.

The purpose of this document is to offer policy suggestions linked to case studies that highlight the growing importance of Free Culture to new models of cultural production. It begins by defining the “cultural economy”, examining the history of cultural industries, looking particularly at the increasing value of art, design, and innovation to a global knowledge economy.

Section One, 'Beyond the Cultural Economy', explores the role of democratic access to cultural resources as fundamental to the development and evolution of Ecuador’s social knowledge economy. It examines the FLOK model of social production as an alternative to proprietary systems around cultural resources and practices. As this section explains, the main features of this model include: (a) the practice of free and open sharing of knowledge and information, (b) the pervasive involvement of a socially-networked community, and (c) the use of the Internet as a material platform for distributed collaboration

Section Two, 'The Ecuadorian Economy in Context', contextualizes changes to Ecuador’s cultural policies by framing these changes in terms of the broader economic system in which the country’s industrialization efforts are now rooted.

Section Three, 'Case Studies', illustrates the FLOK model and its central features through the use of case studies. We examine two case studies that highlight the principles of Open and Free Culture in the context of peer production.

Section Three, 'Public Policy Recommendations', concludes by putting forward some general policy recommendations that build on the FLOK model. This includes a particular emphasis on the “horizontalization” of productive human relationships in the context of reciprocity and commons-based value creation. This also includes the application of principles of a social knowledge economy to cultural production in the context of practices linked to systems of mutualism and commons-based reciprocity.

Introduction: Defining The Cultural Economy
Over the past quarter century, policy discourse in capitalist countries has increasingly focused on the economic needs associated with the production and consumption of knowledge and innovation. Unlike the tangible assets linked to the industrial economy– land, labor, and capital– the knowledge economy is largely defined in terms of abstract goods such as culture, creativity, design, innovation, and learning. Indeed, according to a recent UNESCO (2009: 11) report:

The ‘knowledge-based economy’ finds its economic support in creativity and talent, and emphasises cultural industries as a conceptual framework within which growth generators exist. In that sense, the modern understanding of economic growth and development, which rests on the integrated economy, implies balanced sector networking of cultural activities and industrial sectors with a special emphasis on new ideas and their creative application to development.

Underlying theories of the knowledge economy is an argument that creativity is now the key driver of economic growth. Accordingly, the raw material of the knowledge economy is human talent: “the talent to have new and original ideas and turn those ideas into economic capital and saleable products” (Howkins, 2001, p. 213). Where the “classic” cultural industries are a product of the technological advances of the early twentieth century, the contemporary “creative industries” arise from the information and communication technologies (ICTs) of the late twentieth century (Cunningham, 2001, pp. 19-32). Much of this thinking builds on a rejection of class-based distinctions between the cultural industries– produced for commercial entertainment (film, publishing, music), and the subsidized “arts” (visual and performing arts, museums and galleries) (Horkheimer and Adorno, 2002). In this new revised view, the ideal of national culture is abandoned as elitist and exclusive, while “creativity” is embraced as democratic and inclusive (Galloway & Dunlop, 2007, p. 19).

Tracing the contours of this “cultural economy”, competitive advantage is increasingly derived from investments in the creation of artificial scarcity through the use of copyright (Howkins, 2001). Since the 1990s, policymakers and inter-governmental organizations (IGOs) such as UNESCO have developed fairly elaborate definitions of cultural industries in the context of broader national innovation strategies. Indeed, the evolution of terms like “cultural industries” and “creative industries” is underpinned by a diversity of national policy initiatives focused on new models of economic growth (Cunningham 2001; Flew 2002; Hesmondhalgh 2002; Hesmondhalgh & Pratt 2005).

One major reason for the increasing interest in cultural/creative industries is their growing share of the global economy. In fact, the annual growth rate of creative industries in OECD countries was twice that of the service industries during the 1990s, and four times that of manufacturing overall (Howkins 2001: xvi). Creative industries today are estimated to be growing globally at an average rate of 8.7% per year (UNCTAD, 2008, p. 24). Over the past two decades, world exports of visual arts has more than doubled from $10.3 billion in 1996 to $22.1 billion in 2005 (UNCTAD, 2008). In 2012, the value added by the total copyright industries to U.S. gross domestic product (GDP) exceeded $1.7 trillion or 11.25% of the U.S. economy (Siwek, 2013). Indeed, between 2000 and 2005, world trade in creative goods and services reached $424.4 billion in 2005, or 3.4% of the total world trade:

World exports of creative products were valued at $424.4 billion in 2005 as compared to $227.5 billion in 1996, according to preliminary UNCTAD figures. Creative services in particular enjoyed rapid export growth—8.8. per cent annually between 1996 and 2005. This positive trend occurred in all regions and groups of countries and is expected to continue into the next decade, assuming that the global demand for creative goods and services continues to rise. (UNCTAD, 2008, p. iv)

Section One: Beyond The Cultural Economy
Made up of a cluster of industries at the crossroads of the arts, business, and education, the cultural economy constitutes a complex and varied field of creativity and innovation. Ranging from copyright industries like publishing, music, visual/performing arts, film, media, architecture, advertising and design, on the one hand, to patent industries like engineering, biotechnology, information technology, pharmaceuticals, electronics and advanced materials. For advocates of market-based models of the cultural economy, copyright is the organizing principle and perhaps the very basis for defining “creative industries” (Towse, 2003, p. 170). Indeed, intellectual property (IP) rights are viewed as fundamental to rewarding the ideas of artists and innovators in a competitive cultural market.

IP is critical to notions of the cultural economy because copyright enables cultural goods to be exclusively owned and sold in the market as a capital asset. As Howkins (2001) observes, “Managing creativity involves knowing, first, when to exploit the non-rivalrous nature of ideas and, second, when to assert intellectual property rights and make one’s ideas-as-products rivalrous. These two decision points are the crux of the management process.” Beyond models of cultural production that are strictly focused on proprietary systems, however, there is mounting interest in the potential of new models of cultural production that emphasize commons-based resources and practices. Highlighting the value of knowledge as a public good, for example, Stiglitz, (1999) reminds us that despite the fact that scarcity is a precondition for the economics of supply and demand, knowledge itself is not a scarce resource. As a public good, any number of people can construct, consume, and use knowledge without necessarily depleting its’ value.

Building on this understanding, the cornerstone of the FLOK model is the free and open sharing of knowledge. The FLOK model is an alternative to neoliberal market models of economic and technological development which is rooted to three main features: (1) it is based on the practice of free sharing of knowledge, which is sustained and reinforced by an innovative and, arguably, subversive use of IP rights; (2) it is community-driven and (3) it leverages the Internet for distributed collaboration. Its founding philosophy is that technology is most efficiently developed in conditions of openness and collaboration. By democratizing access to technology, cultural resources and knowledge, the FLOK approach seeks to empower communities to participate in the production and consumption of knowledge through the use of open licensing. In this way, the FLOK model challenges the predominant view that market-based institutions are the best systems for developing knowledge and innovation. Instead it suggests that open, community models are superior to corporate models in accommodating creativity and delivering innovation. The FLOK model emphasizes the design and development of Open and Free Culture in the context of social reciprocity. This is to say, a culture free of restrictions on the collaborative production of knowledge and culture. We believe that the social and political institutions needed to enable Open and Free Culture must be supported by the legal protections provided the state. We also believe that this freedom of cultural production inherently encourages creativity and diversity, enabling knowledge to circulate through societies without impediment or obstruction. Through open systems of cultural production, new ideas can arise and from diverse perspectives, encouraging complex systems of meaning-making across a variety of disciplines.

Section Two: The Ecuadorian Cultural Economy In Context
In order to contextualize contemporary changes in Ecuador’s social planning, it is important to situate these changes within the broader context of its economic policies. Ecuador's economy is the eighth largest in Latin America but is largely rooted in petroleum export. In fact, the oil sector accounts for 50%-60% of the country’s export earnings (Center for International Economic Studies, 2012). This amounts to 15%-20% of GDP, and 30%-40% of government revenues. In 2010, for example, crude and refined petroleum products accounted for 56% of total export earnings. In addition to petroleum production, manufacturing is primarily for the domestic market, with additional exports in agricultural products[1](#sdfootnote1sym). Although the country’s GDP growth dropped to 0.4% after peaking at 7.2% in 2008, it has since rebounded to 3.6% (Center for International Economic Studies, 2012).

Beyond oil exports, President Correa's social and economic priorities have focused on higher spending on welfare programs coupled to state-managed economic growth policies. Between 2006 and 2009, for example, the government increased spending on social welfare and education from 2.6% to 5.2% of GDP. This included expansionary fiscal policies and large investments in education and infrastructure. With a constitutional mandate rooted in the development of social protection policies and a fundamentally new approach to expanding inclusive economic growth, the Correa government has focused on industrial policies that leverage State-managed growth strategies. The central problem facing the Correa government, however, is an excessive concentration of economic activity in primary production (SENPLADES, 2013). Indeed, cultural industries currently represent less than 2% of the total economic activity of the country. As Ecuador seeks to diversify its export base and industrialize its economic activity, creative and cultural industries have become positioned as a sector of opportunity. Notwithstanding the need to restructure these sectors, most analysts believe that the ability of cultural industries to generate revenues for the country is vast.

As Ecuador's National PlanBuen Vivir or Good Living (SENPLADES, 2013) makes clear, the necessity for the national economy to reduce its dependency on natural resources and accelerate its engagement in building a "knowledge economy" is critical to its future prosperity. To this end, education and cultural development are viewed as keyinvestments for the wellbeing of the country. Indeed, the 2013 Good Living Plan promotes a strong recognition of the importance of cultural development to a prosperous and democratic society. Building on an explicit emphasis of advancing a knowledge-based society, the Plan focuses on developing cultural resources that can move the economy beyond “finite (material) resources”.

Ecuador’s National Plan addresses culture in terms of two major fields of interest: “cultural principles and rights, and the National Culture System, designed to guarantee effective enforcement of the two (Article 377)”. Accordingly, “these rights embrace a contemporary vision of culture, understood as a dynamic social [whole] that is in constant transformation and generates new content, modifying and recreating cumulative knowledge” (p. 65). As the National Plan elaborates, cultural industries may be critical to social and economic development but they are also fundamental to serving the public interest:

Here, cultural industries make possible the construction of alternative symbolic contents that subvert the hegemony of dominant and dominating ideologies. A country seeking to rebuild its economic structure must ground this change in its ability to erect the country symbolically, in an environment that protects the circuits that circulate contents (PAIS Alliance Movement, 2012: 163-165). (SENPLADES, 2013, p. 65)

The Good Living Plan goes on to underscore the interdependent relationship between cultural production and the public good. Beyond systems of domination and exploitation, cultural industries are linked to cultural rights that must be respected and must facilitate the eradication of social pathologies such as racism, classism, and colonial subjugation:

Collective construction of public spaces, as a shared space of encounter, is fundamental to replace authoritarian, violent forms of coexistence with other ways of living together that can overcome societal conflict and build a free, peaceful culture of intercultural dialogue. Cultural rights reflect a fundamental problem: domination. Social domination has a strong cultural component, marked in the Ecuadorian context by racism inherited from colonial times, the class-based marginalization inherent to capitalism and its market logic, a predatory individualism promulgated by neoliberal capitalism, patriarchal machismo conveyed through diverse vernacular traditions and an emerging xenophobia that undermines the construction of a universal, intercultural citizenry. (p. 64)

Section Three: Case Studies
In many ways, Open and Free Culture is about more than culture. It is about enlarging community participation in the design and evolution of sociocultural institutions and practices. This includes a particular stress on “bottom-up” social dynamics in the context of social learning and the shared development of human capacities. Indeed, the ideal of Open and Free Culture suggests a balanced interpretation of producers’ rights in which communities are free to use and develop cultural works without restriction.

The truth is that culture is larger and more important than the market. Since culture has existed independently of markets throughout history, safeguarding the rights of producers and consumers of culture should be a critical goal of policymaking. Cultural production is not synonymous with profitability. In fact, culture as a profit-making industry can even be detrimental to the free circulation of knowledge and ideas. The ideal of Open and Free Culture is predicated upon abundance over scarcity. Rather than depending on market mechanisms for product and service distribution, Free Culture is primarily interpreted in terms of community-building and audience creation. Within conditions of abundance, for example, the greatest threat to cultural producers is not “piracy” but obscurity (FCForum, 2013). Perhaps most importantly this includes the use of new models for sustainable cultural production that go beyond the need for restrictive access. The Creative Commons (CC) license, for example, is one of several copyright licenses that enable the free distribution of cultural work. Put simply, the purpose of the CC license is to enable cultural work to be made freely available to share, use and build upon without artificial restrictions. To appreciate the rising importance of Open and Free Culture, it would be helpful to explore a few case studies.

Case-study 1: Architecture for Humanity
A strong illustration of the power of commons-based cultural production is the example of Architecture for Humanity (AFH). AFH is a not-for-profit organization founded in the United States in 1999 that uses sustainable architectural solutions to respond to humanitarian crises. With 58 chapters in 16 countries around the world, AFH aims to promote humanitarian and social design through partnerships, advocacy, and educational programs. Past initiatives include design and reconstruction in India and Sri Lanka following the Indian Ocean Tsunami, and rebuilding in the United States after Hurricane Katrina.

Pairing local communities with architectural design professionals, AFH uses intelligent design to manage against scarce resources. Currently active in West Africa, South-East Asia, and South America, the not-for-profit organization uses government consulting and relief support, to expand the notion of pro-bono design into commons-based communities of practice. Over the past ten years, AFH has hosted international design competitions focused on relieving systemic poverty, and has received numerous awards including the TED Prize in 2006, as well as the Center for Architecture Foundation Award In 2007.

Perhaps the most important feature of AFH, however, is its adoption of the open source model in 2005. Using the CC license, AFH introduced the first creative commons-based architecture and at the same time, authorized a wide network of local affiliates to support construction management services. Building on the CC license, AFH has been able to operate at a global scale without the need for bureaucratic centralization. And by opening their organization to local communities of practice, AFH has applied a model that is both global and local at the same time, while using situated design and innovation to solve problems. Put differently, as opposed to centralized planning and the use of command hierarchy to manage labor, AFH has been able to leverage networks to support distributed cultural production. Most importantly, its use of the CC licensing system demonstrates the capacity of commons-based organizations to support scalable cultural production in both virtual and physical design domains.

Case-study 2: The Artistic Freedom Voucher
Developed as an alternative means for compensating artistic work, the Artistic Freedom Voucher (AFV) is designed to provide support for creative workers without the use of copyright (Baker and Weisbrot, 2011). Proposed by macro-economist and co-founder of the Center for Economic and Policy Research Dean Baker, AFV is loosely modeled on the tax deduction for charitable contributions in the United States. The AFV system aims at giving a fixed sum (e.g. $130 a year or roughly 0.25 percent of per capita income) to every adult in order to donate to the creative worker or organization of their choice (Baker and Weisbrot, 2011: 3). The goal of the voucher is to maximize the opportunity for individuals to target funding for creative work. The advantage of alternative compensation systems like AFV over copyright is that they do not impose artificial scarcity on copyright works because anyone can access cultural and creative work as they so choose. Rather than limiting creative work to market-mediated pay-walls, AFV provides a means to reward artists while at the same time distributing their work. In addition, the high social and technological costs associated with copyright enforcement are avoided completely.

Part of the problem with the copyright system is that disproportionate levels of profit consumed by companies that mediate artistic work, can undermine both the incentives and levels of risk that artists and cultural workers are able to sustain. Under the AFV system, individuals or organizations are required to register with a governmental organization, identifying the type of creative work in which they are engaged (e.g., writing, music, film making, etc.). Much as tax-exempt organizations, the purpose of such a registry is to establish a record that can be used to prevent financial fraud. In order to avoid dual revenue for example, individuals and organizations receiving funding under the AFV system are not be eligible for copyright protection for a specified period of time.

A proposal to introduce the AFV system in Ecuador offers an interesting approach to funding creative work with several distinctions to provisions in the U.S. This proposal is | open for discussion in the Flok Project / Buen Conocer Some of the distinctions include (Restrepo, 2014):

1. The right to allocate funding through vouchers is based on residency in Ecuador rather than tax payment (analogous to the right to vote).

2. Closer linkages to popular power rather than the capitalist market or top-down power of the state.

3. A strong application of the Internet as a platform for financial allocation.

4. A working operating principle that creative work is to be protected as a public good freely enjoyed by anyone.

5. A focus on public participation in decisions on creative work, including the wide enjoyment of Ecuadorian artistic work for free, and the financing new opportunities for artists.

6. The inclusion of a minimum income for participating artistic workers, based on principles of human rights and the minimization of risk for experimental creative work.

Taken as a whole, the value of the AFV system is that it seeks to completely reverse the dynamics of the copyright system so that creative work can be made as accessible as possible. The larger goal of this approach is to maximize the degree of individual choice in determining which creative work should be supported, while also taking full advantage of digital technologies. Perhaps most importantly, despite the fact the AFV system is a government-supported program, it eliminates state intervention and state bureaucracy while at the same time supporting creative work.

Section Four: Public Policy Recommendations
Despite the fact the movements advocating Open and Free Culture have proliferated over the last two decades, the formal institutions needed to ensure a full democratization of cultural production have not yet fully matured. Indeed, the rise pf Free Culture suggests the need for legal protections that enable the widest possible access to knowledge, ideas, and creativity. Much as for-profit cultural industries are protected through intellectual property rights and the rule of law, so should the cultural commons be protected by formal institutions anchored to the State. Supporting community collaboration by subsidizing democratic cultural production, for example, can offer government a vital way to promote intercultural dialogue and enhanced cultural identity.

1. Funding Support for Culture Work

One of the major challenges for transforming the incentives that sustain the for-profit cultural economy, is the relatively marginal levels of financial support that are offered for cultural work, particularly cultural industries that promote the public good. In order to ensure a diverse and prosperous culture in Ecuador, it is important to maintain a diversity of financial mechanisms for remunerating artists and cultural workers. An alternative means of provisioning a commons-based model of the arts and culture has the potential to revitalize cultural work that serves the public good. This includes grant opportunities and voucher systems such as the Artistic Freedom Voucher to assist organizations, museums, professional associations, research centers, and creative artists to potentially cooperate and work across disciplines. This also includes crowd-funding platforms that allow the public to directly subsidize Ecuadorian artists and cultural workers. Just as crowd-funding project have begun supporting a variety of nonprofit campaigns including schooling and social service organizations, so can patrons of the arts provide direct support for developing commons-based communities-of-practice.

2. Formal Classification of Cultural Industries

As the recent UNESCO (2009) report on cultural industries points out, there is a general lack of a “unique and common platform for discussing the classification of cultural industries, the measurement of their economic impact, and the potential of linking and upgrading multidisciplinary approaches” (p. 80). This is not simply a challenge for Ecuador but a challenge for countries and regions around the world. The lack of a formal institutional structure around creative industries makes it difficult to properly assess the contribution of creative industries to society and to the economy. The first suggestion for developing open and free culture in Ecuador is to begin to the process of institutionalizing the creative industries through a department or agency at the State level. This would necessarily include models of evaluation that properly differentiate between market driven forms of cultural industry and free cultural production communities.

3. Open and Universal Access to the Internet

Building on the Barcelona Charter for Innovation, Creativity and Access to Knowledge proposed by the Free Knowledge Institute, we advocate for universal access to the Internet as a foundation for Open and Free Culture. As Free Knowledge Institute observes, Internet access is essential for learning and freedom of expression, communication and participation in a knowledge society. This includes open standards as a precondition of net neutrality, and access to free unlicensed spectrum to allow citizens the freedom to collaborate on shared projects that may exist outside market dynamics.

4. Public Access to Knowledge and Culture

The freedom to access knowledge requires legal protections from copyright infringements particularly in relation to the public sphere. This means that there should be no copyright limitation on government, political and/or legal documents that service the public. This is especially true of publicly funded research produced by research universities and research centers. Assuming that the wider purpose of public research is to serve the public good Patents or copyrights held by public institutions should be released under royalty-free terms. Wide access to the public domain ensures that all citizens have free and equal access to produce and consume knowledge and information without limitation. This includes legal provisions that facilitate and promote free and open licensing to ensure the widest possible access to knowledge.

5. Privacy and Transparency

All citizens, regardless of their economic or political circumstance, should have the right to access Internet resources anonymously and have legal protection over their personal data. The capacity to protect one’s electronic data is a basic right that should be safeguarded much as property rights protect personal goods and services allocated through the market. This of course assumes that there is transparency in the application of laws protecting these rights. Governments should be held to a high standard through systems of evaluation that ensure the rights and protections of personal electronic data.

Conclusion
The FLOK model is envisioned as an alternative to neoliberal market models of economic and technological development and assumes that the community-driven practice of free sharing of knowledge and culture is right that belongs to all citizens in a democracy. Contrary to this approach, the FLOK model emphasizes a commons-based approach of cultural production that eliminates for generating artificial scarcity. In contrast to conventional notions of the knowledge economy that depend upon the need to recoup capital investments by and through intellectual property regimes, the FLOK model emphasizes common property and the widest possible latitude for shared use. The FLOK conception of a social knowledge economy rests on the view that free and open access to cultural resources and artifacts provides the best means for ensuring creativity and innovation. Put simply, the FLOK approach seeks to empower communities to participate in the production and consumption of knowledge through the use of open licensing. In this way, the FLOK model challenges the predominant view that market-based institutions and suggests that open, community-driven models are better at leveraging creativity and innovation. Put simply, we advocate the application of principles of a social knowledge economy in support of open and free cultural production.

As this document has already stated, the principle of Open and Free Culture is about more than the arts or about the growth and development of culture itself. The principle of Open and Free Culture is about enlarging democratic participation in the design and evolution of sociocultural institutions and practices. This proposal has offered policy suggestions linked to case studies on Open and Free Culture in order to highlight the growing importance of democratic cultural production in support of the widest possible access to shared cultural and artistic content. This includes a particular emphasis on public policies that steer cultural production, in the context of the production, distribution, and consumption of creativity and innovation.