Wednesday, April 11, 2012

The Homebrew Production Model

In earlier columns in this series, we've explored technologies that promise to challenge mass production and distribution of goods, much as decentralized arts have begun to challenge the major media outlets and local farming is becoming a nascent threat to factory farming; technology that will soon be as readily available to the local craftsman as farming implements are to the local farmer.

Both an ecological and economic case can be made for the wastefulness of the current production-push model of goods creation. Making cheap, disposable goods centrally and distributing them globally in a never-ending cycle uses considerably more resources and energy than crafting durable, repairable goods for a smaller geographic area. As with produce, the hidden costs of socialized infrastructure account for a considerable portion of the supposed economic advantages of mass production.

The counter-argument can be made that only centralized production lines can produce many goods, such as today's sophisticated electronic consumer goods. To continue down the path toward a more decentralized economy, new models of decentralized production will be necessary. Fortunately, some models have already shown themselves to be viable, and others offer great promise.

Andrew “Bunnie” Huang writes of the Chinese shanzhai phenomenon, a major source of underground electronics that break or skirt existing US copyright laws.
Typically dismissed by popular press as simply the “copycat barons from China”, I think they may have something in common with Hewlett and Packard or Jobs and Wozniak back when they were working out of garages.

The contemporary shanzhai are rebellious, individualistic, underground, and self-empowered innovators. They are rebellious in the sense that the shanzhai are celebrated for their copycat products; they are the producers of the notorious knock-offs of the iPhone and so forth. They individualistic in the sense that they have a visceral dislike for the large companies; many of the shanzhai themselves used to be employees of large companies (both US and Asian) who departed because they were frustrated at the inefficiency of their former employers.

They are underground in the sense that once a shanzhai “goes legit” and starts doing business through traditional retail channels, they are no longer considered to be in the fraternity of the shanzai. They are self-empowered in the sense that they are universally tiny operations, bootstrapped on minimal capital, and they run with the attitude of “if you can do it, then I can as well”.
He estimates 300 organizations operating in Shezhen alone, ranging from a couple of folks to a few hundred employees; product runs are as short as a few hundred units. Estimates of 20 million phones a month from those organizations indicate an economy approaching a billion dollars a month.

Wikipedia has a much less charitable view of the shanzhai movement.

While the shanzhai essentially ignore US copyright law, as we saw in Open Source Freedom there is a parallel movement to develop designs that are both legal and carry no intellectual property licensing fees. The shanzhai culture thereby becomes an organizational model for small-scale, craft-like production facilities that could be located in small sites, even homes and garages. Open source is one of the stones in David's sling when going up against the corporate Goliaths.

General-purpose machines such as 3D printers and computer-numerical-controlled machine tools can be rapidly retasked from one project to another by a change in their programming; that programming may come directly from open source designs shared around the world through common on-line design software such as that we mentioned in Open Source Freedom.

The Wall Street Journal reported on the move toward localized production almost three years ago, in Tinkering Makes Comeback Amid Crisis, although they failed to tie it together with all the other bits we've been exploring.
The American tradition of tinkering -- the spark for inventions from the telephone to the Apple computer -- is making a comeback, boosted by renewed interest in hands-on work amid the economic crisis and falling prices of high-tech tools and materials.

The modern milling machine, able to shape metal with hairbreadth precision, revolutionized industry. Blake Sessions has one in his dorm room, tucked under the shelf with the peanut butter on it.

The Massachusetts Institute of Technology junior has been using the mill to make prototypes for a bicycle-sprocket business he's planning. He bolts down a piece of aluminum plate, steps to his desk and, from his computer, sets the machine in motion.
A start-up manufacturing firm, based in a dorm room. And this is just one example.
Occupying a space somewhere between shop class and the computer lab, the new tinkerers are making everything from devices that Twitter how much beer is left in a keg to robots that assist doctors. The experimentation is even creating companies. With innovation a prime factor in driving economic growth, and corporate research and development spending tepid, the marriage of brains and brawn offers one hopeful glimmer.
The concept has expanded to hackerspaces, workshops for people to share tools and ideas. Wikipedia has a decent overview of the hackerspace community, and there is also a separate wiki at

Make: magazine is dedicated to what they term the maker subculture. "Typical interests enjoyed by the maker subculture include engineering-oriented pursuits such as electronics, robotics, 3-D printing, and the use of CNC tools, as well as more traditional activities such as metalworking, woodworking, and traditional arts and crafts." Maker Faires occur regularly around the country and are starting to spread around the world.

Dale Dougherty gave a TED talk on these related concepts just over a year ago.

In the lecture, he argues that all of us are makers. We are creatures who need to make things. Makers are a part of out history and culture, as he illustrated with a video from Chevrolet, made in 1961. Increasing complexity short-circuited the maker mentality for a period of time, but new electronic maker tools have re-enabled the process. He then goes on to discuss hackerspaces, electronic microprocessor kits, MakerBots, and the joy of experimenting with technology.

New methods of funding startups, such as Kickstarter and Indiegogo offer opportunities for those with innovative projects to seek voluntary funding from like-minded individuals, bypassing the gatekeeper functions of government and foundation grants, bank loans, venture capitalists and stock offerings. We first looked at the concept in Pizza Federalism, Kickstarter and the Arts.

Cory Doctorow's novel Makers is "a book about people who hack hardware, business-models, and living arrangements to discover ways of staying alive and happy even when the economy is falling down the toilet." (Free download site; paperback version from Amazon.

The makers will become the entrepreneurs of the Phoenix society. The Chinese shanzhai model, open source integration similar to the TinkerCad/Thingiverse/MakerBot model, home and community workshops such as hackerspaces and Maker Faires all point the way to decentralized industry and the distributed production future of the Phoenix society. Internet funding platforms bypass the essentially centralized existing sources of startup funding.

...and that's all I have to say about that.
The Phoenix Society series continues with The Underground is Surfacing. Here's a Table of Contents for the Phoenix Society series of posts.


  1. You can get too carried away with this "local" thing. There's room for that and free trade across the globe. I live in rural Wyoming, far from cities. We produce coal, oil, gas and - decreasingly - beef.

    I enjoy Columbian coffee and a certain amount of fruits and vegetables, among other things... none of which can be produced here economically, if at all.

    The key isn't where it is produced, but freedom to produce and trade. As long as we are not aggressing on others, it shouldn't matter to any but willing participants.

    1. I agree. Unfortunately, the state still has a tendency to get in the way.

      I'm a fan of coffee (and chocolate) too, and I agree that some products just can't be produced locally. That won't keep me from buying them.

      OTOH, where production can be localized, socialized costs and energy consumption are reduced, (non-mega-corp) profits stay in the community -- and the revenue stream can more likely avoid both taxation and regulation. ;)

      As for those "exotic, far-away" products, we might pay more for coffee absent the state, if we ignore the socialized costs we now pay through taxes. Those taxes support massive technical and bureaucratic infrastructures that distort what it really costs to produce any product and represent a tremendous "overhead burden" approaching 50% of every dollar you earn.

      Would coffee cost more, or less, if a pound bore the full cost of its production? My guess is that any increases in the transportation, resource or energy costs would be more than offset by the massive reduction in regulatory compliance costs and the increase in competition and innovation generated by the reduction of barriers to entry.

      I expect voluntary product certification along the lines of competing "Underwriter Laboratories" for food will be cheaper than the current USDA, FDA, EPA, HEW, DHS bureaucratic method by a large factor. Those who believe in the efficiency of government agencies are free to disagree.

  2. Very interesting stuff. I had no idea stuff like this was happening, especially at these levels. There does seem to be an underground world (the rabbit hole, perhaps? :) ) that I knew nothing about.

    I admit to enjoying a lot of our luxuries. I admit it would be hard to give them up to ONLY buy local or ONLY use that which we can make, grow, create ourselves. It's a great idea, but overwhelming and makes me want to throw my head back under the sand.

    I fairly recently read The Carnivore's Dilemma. My husband and I watched together a bunch of those documentaries. We both were disgusted and decided to buy local and organic as much as possible. To recycle and reuse and make an effort to be more green.

    A week later, my husband gave up.

    I still try, but I can only do so much. Just the other day, I mentioned I wanted to get our produce at the local farmer's market instead of Costco, now that the farmer's market is open again. We go through a TON of fruits and veggies. My husband said absolutely not - the food isn't as good at Costco, but we can get much much more for much much less, and he wasn't willing to spend $10 for a some lettuce that will be gone in a week. (or less...I eat salads at every lunch and dinner).

    1. I meant to add that it does bolster my hope, to hear of these stories of dorm room productions and underground iPhone creators. :)

    2. As I mentioned in the reply to Open Source Freedom, this isn't an on-off switch; think of it as a slider, or a trend. As localization expands, fuel gets more expensive, and transportation costs increase do to deteriorating infrastructure, the difference in price between the two sources will continue to decrease. The price difference will make more sense to people the lower it gets, encouraging more local production, and around it goes in a feedback loop.

      And here's a question you can ask hubby that may make an impact on the farmer's market issue... would he buy gas that made his car's engine knock, retread tires, and oil that didn't lubricate as well to save a few bucks on car maintenance? Forget taste, is the food at Costco as healthy for the engine it's running as that at the farmer's market?

      Again, the price point is different for everyone, and they may not have reached your point yet, or you may find some items are worth the extra cost while others are not. For example, I'm not that picky about lettuce, but long-distance tomatoes are tasteless to me compared to local produce; if I only have a few bucks to spend at the roadside veggie stand, it's gonna go for tomatoes and melon and stuff like that, and I'll cope with the flat, tasteless lettuce as a backdrop in the salad. Other people have different preferences.

    3. We actually did compromise - get fruit at the farmers market and veggies as Costco. We go through veggies much faster, and actually, much of it from Costco is pretty decent. They have delicious cherry tomatoes. But their fruit isn't so good, and we don't always eat it all before it goes bad.