Category Archives: cooperatives

The Great Promise of Social Co-operatives

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The austerity agenda is often presented as inevitable, which is really just a way for corporatists and conservatives to dismiss any discussion or debate. “There are no alternatives!” they thunder.  But as Co-operatives UK demonstrates in a brilliant new report, there are a growing array of highly practical alternatives that are both financially feasible and socially effective. They are known as multi-stakeholder co-operatives, or more simply as “social co-operatives.” 

While most of us are familiar with consumer or worker coops, the social co-operative is a bit different.  First, it welcomes many types of members – from paid staff and volunteers to service users and family members to social economy investors.  While many coops look and feel like their market brethren, with a keen focus on profit and loss, social coops are committed to meeting social goals such as healthcare, eldercare, social services and workforce integration for former prisoners. They are able to blend market activity with social services provisioning and democratic participation, all in one swoop.

Pat Conaty is author of the report, “Social Co-operatives:  A Democratic Co-Production Agenda for Care Services in the UK.”   He explains how the legal and organizational structures of multi-stakeholder co-operatives – as well as their cultural ethos – generate all sorts of advantages.  They can deliver services more efficiently than many conventional businesses.  They are more adaptable and responsive than many government programs.  And they invite active, inclusive participation by members in deciding how their needs shall be met -- and in contributing their own knowledge and energies.

The report examines best practices in co-operative health and social care services, and profiles the success of social coops in Italy, Japan, France and Spain, among other countries, as well as in Quebec, Canada. 

The Italian experience with social coops is especially impressive.  Since passage of a 1991 law that authorizes social co-operatives and provides public policy support for them, Italians have started 14,500 social co-operatives that employ 360,000 paid workers and rely on an additional 34,000 volunteer members.  The typical coop has fewer than 30 worker-members, and provides services to the elderly, the disabled and those with mental illnesses.  Some provide “sheltered employment” for people with disabilities and other vulnerable groups.

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Bauwens: Use a Peer Production License to Foster “Open Cooperativism”

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Michel Bauwens of the P2P Foundation recently published a short essay noting that the economic fruits of peer production in today’s world tend to be captured by capitalists – whereas what we really need is a system to enable capital accumulation for and by commoners themselves.  To that end, Bauwens embraces the idea of a Peer Production License, as designed and proposed by Dmitri Kleiner.  

The idea is to emancipate online commons from the control of capital and corporations, and to enable cooperatives working within the market system to reorient themselves to the larger common good, and not just their members. Bauwens’ essay, originally published on the P2P Foundation blog, follows below:

The labor/p2p/commons movements today are faced with a paradox.

On the one hand we have a re-emergence of the cooperative movement and worked-owned enterprises, but they suffer from structural weaknesses. Cooperative entities work for their own members, are reluctant to accept new cooperators that would share existing profits and benefits, and are practitioners of the same proprietary knowledge and artificial scarcities as their capitalist counterparts. Even though they are internally democratic, they often participate in the same dynamics of capitalist competition which undermines their own cooperative values.

On the other hand, we have an emergent field of open and commons-oriented peer production in fields such as free software, open design and open hardware, which do create common pools of knowledge for the whole of humanity, but at the same time, are dominated by both start-ups and large multinational enterprises using the same commons.

Thus, we need a new convergence or synthesis, a ‘open cooperativism’, that combines both commons-oriented open peer production models, with common ownership and governance models such as those of the cooperatives and the solidarity economic models. What follows is a more detailed argument on how such transition could be achieved.

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Reflecting on the Recent History of the Commons

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It’s clear that commoners will not only have to make history themselves, outside of ordinary channels, but to write and preserve that history as well.  My colleagues Silke Helfrich and Michel Bauwens are off to a great start.  Independently, they’ve prepared two useful syntheses of some of the more significant recent developments in the commons and P2P worlds.

Silke prepared a timeline that identifies landmarks in the commons movement from the past several years.  The piece just appeared in the Winter 2014 issue of STIR magazine (about which I will have more to say below).  The timeline is on Silke’s blog as well.  Among the highlights: 

The rise of Remix the Commons (2010 – present), an evolving multimedia project about the key ideas and practices of the commons.

The Atmospheric Trust Litigation (2011 – present), which is filing lawsuits under the public trust doctrine to force state governments and the U.S. Government to protect the atmosphere as common property.

The world’s first Open Knowledge Festival in Finland, a week’s events in September 2012, in Helsinki, Finland.  (The next Open Knowledge Festival will be in Berlin in July 2014.)

The Constitutional Assembly of the Commons held with 700 participants at the occupied Teatro Valley, a revered opera house in Rome, in April 2013.

The timeline also has some great illustrations by Hey Monkey Riot.

Meanwhile, Michel Bauwens posted the “Most Important P2P-Related Projects and Trends in 2013.”  He cautions that “most important” “does not mean any blanket endorsement, nor ‘best.’  It just means that it is an important project.”  

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Co-operative Place Making through Community Land Trusts

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A fascinating new report just published by Co-operatives UK describes the huge potential of community land trusts and other forms of mutual housing and enterprise. Commons Sense:  Co-operative place making and the capturing of land value for 21st century Garden Cities brings together a wealth of insight into the practical solutions that community land trusts (CLTs) can provide. 

By converting land into commonwealth – capturing escalating land values for everyone’s benefit – it is possible to make housing more affordable and to finance all sorts of infrastructure and services that make communities more stable, attractive and thriving.  What’s not to like?  (Well, if you’re a bank, private landowner or speculator, you may not like the competition of a superior financial model.)

The Commons Sense report, edited by Pat Conaty of Cooperatives UK and Martin Large of Stroud Common Wealth, succinctly describes the basic problem:

The high cost of housing is draining money out of the productive economy, mainly through land and house price inflation, with damaging effects for national and individual household budgets.  Many new homes are unaffordable to ordinary working people, some offer poor value for money in terms of quality or construction, design and energy performance, and cost pressures frequently drive out good design in the spaces between buildings and in the concept of supporting new neighbourhoods.  Many new developments are socially, environmentally and economically obsolete from the moment they are conceived, let alone designed or built.

Conaty and Large note that in Britain, only 0.6% of the population – 36,000 people – own about half of the land.  This is a significant structural reason for soaring housing prices and continuing wealth inequality.

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Cooperative Co-Production of Solar Power in a Small Town

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A vexing problem for many potential commons is the lack of startup capital to get a project going while nurturing the social structures to organize participation and work.  I recently learned of an ingenious solution developed by a group of “time banking” commoners in West Virginia.  They adapted a traditional Time Bank system of barter-exchange and combined it with common pool of funds, which in turn served as an engine of development for DIY solar power installations -- in the heart of coal country, West Virginia!

Greg Bloom of Washington, D.C., who has a keen interest in cooperatives and commons, alerted me to his case study of the project.  (Thanks, Greg!)  As he tells the story at the Community Power Network website, the tax incentive approach to promoting solar power has distinct limits.  It is too geared to people who already earn enough to benefit from the tax breaks.  But what if you are low-income and have trouble paying your utility bills?  You don’t earn enough to be incentivized, and you don’t have enough to pay for the upfront costs of a solar project.

In the town of Philippi, West Virginia, a local engineer, John Prusa, known locally as a “benevolent mad scientist,” had “designed and built his own home’s solar power array, and then shared his designs with neighbors and helped them develop their own,” writes Bloom.  Prusa and a local minister, Ruston Seaman, of People's Chapel Church, found each other, and decided to start a new group, New Vision Renewable Energy. 

The Church had once been the host of a flourishing Time Bank system with over 300 members, and even a store that accepted the Time Bank credits.  But the system had fallen into disuse for a variety of reasons.  Time Banks are a system by which members can earn credits for work they do for each other, at a rate of one credit, one hour of work. The systems are especially valuable for people with more time than money, such as low-income people and the elderly.  It helps them get their needs met, without money, outside of the marketplace.  Time Banks can serve important needs in areas that banks and markets have abandoned or ignored. 

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