Writing for Forbes last December, Cameron Keng argued that if Apple were a co-operative, each of its employees — from mine to production line, in-store genius to CEO — would have earned a $403,000 share of its profits last year, on top of one’s salary. But Apple is neither jointly owned nor democratically controlled by its workers. Nor are the vast majority of digital companies starting-up today.
Companies like online shoe retailer Zappos, now owned by Amazon, have famously adopted holocratic principles that encourage a flatter structure and abolish job titles, but that greater equality ends at wages and stock options. While Zappos looks a far cry from the rigid hierarchy seen at Apple, its approach appears more as a socialization of efforts and privatization of profit, hardly opening up the business for the benefit of all its workers.
“The Internet is built upon global cooperation and collaboration often with people you don’t even know,” said Rhiannon Colvin, founder of AltGen, which helps young people combat youth unemployment and precarious work by setting up their own co-ops. “There is a lot of synergy between the values of the open-source movement and the co-operative movement, but it has yet to be capitalized on.”
She added, “Imagine if new digital and tech inventions such as Facebook or Uber were owned by the people that actually create the wealth — the users of Facebook that generate the content and all the taxi drivers that work with Uber. Of course, there would still be paid staff to run it and innovate, but the shares and growth of the business would be making everyday people richer, not already-wealthy investors.”
In just such a move, Marcos Menendez launched the TheGoodData co-op a few months ago to see if he could help combat growing issues about data ownership by ensuring that “users are part of the solution.” But he’s only too familiar with the challenges that co-ops can bring. Global finance systems are not built for them and there isn’t yet an out-of-the-box solution for setting one up anywhere in the world. There are also questions over whether co-ops can work at scale and, in an increasingly unequal society, how to garner the necessary first-stage startup costs.
La’Zooz, a ridesharing platform launched late last year that offers users community-based tokens for shared journeys, is attempting to get around this complexity by operating without any ownership. “It has governance principles and tools, but has no legal basis,” Menendez explained. “Its members couldn’t set up an office, but they can work together to try and oust Uber and Lyft.”
One of the key things a co-op model could offer tech is a re-engagement with its supply chains and a more holistic approach to tech production. Catherine Williams is a director (alongside all of her colleagues) at workers’ co-op Unicorn, a food store based in Manchester. “Regardless of a member’s primary role, everyone has shop-floor time, whether it’s on the till, managing the store, making soup at the deli or packing commodities on our production site,” she said. “In food, we talk a lot about the farmers, the people doing the hard work in the fields. In tech, nobody really talks about the factory workers, working long hours, or the children out in illegal mines foraging for tin.”
The collaborative message does seem to be hitting home with some unlikely characters at the top of the tech industry. Fred Wilson, a venture capitalist with Union Square Ventures in New York City, has started engaging in online conversations with his peers about community ownership of tech companies. “With more and more web and mobile applications deriving their value mostly or completely from their user base (Facebook, Twitter, eBay, Etsy, Reddit, Kickstarter, Uber, etc), there is a growing sense that the community could or should have some real ownership in these businesses,” he wrote in January.
Some policymakers are also taking note. A $1.2 million investment in workers’ co-ops by the New York City Council announced last year was quickly bettered by a $5 million investment by the mayor of Madison in Wisconsin. “With a co-operative you don’t have to worry about a buyout,” said Mayor Paul Soglin. “You don’t have to worry about a CEO one day picking up and moving the company to Fargo. With a co-operative you can have confidence that the company and the wealth it generates are going to stay local.”
Williams of the food shop in Manchester said, “The main perk for me is, ‘a problem shared is a problem halved,’ and if I had a similar role in a hierarchical business, I’d probably have a lot of sleepless nights. The only negative I can come up with is decision-making. Consensus isn’t always the easiest or quickest method, but the advantages are well worth it. We learn from one another all the time and are able to make strong, well-founded decisions upheld by a unified and active membership.”
Still, Rhiannon Colvin believes the co-operative movement has been “incredibly bad at making itself look cool, sexy and progressive,” which is a real issue for our image-obsessed culture. But, she added, “It fundamentally challenges capitalist structures of power and wealth distribution, which most startups replicate.” Perhaps cooperation simply appears more of a political statement than many apolitical techies are willing to make.
On the evening of the 16th July 2014 in a small bar of SingerStraße in Berlin a group of Open Knowledge Festival attendees came together for a meeting, to discuss whether cooperatives offered the potential to create formalised structures for the creation and sharing of common data assets, and whether this would enable the creation of value for their stakeholders. This discussion is sets the framework for an event that will take place in Manchester UK on the 20th October 2014
The discussion was initially broken down into seven themes of
Models: How do the varied models of cooperative ownership fit to data, and do new forms of cooperative and commons based structure offer potential solutions?
Simplicity: Can one model fit all data or do different scenarios need tailored solutions
Transparency: How can a cooperative that is steered by its membership along ethical grounds also be considered open?
Representation: Do individuals have enough control over their data to enable third party organisations such as a cooperative, to represent their data?
Negotiation: How can cooperative members balance control over their data with use by third parties?
Governance: Is it possible to create an efficient system of governance that respected the wishes of all members?
Mechanisms of transaction: Can a data cooperative exist within a federated cooperative structure and how would it transact and create value.
This is a synopsis of the discussion
Why create a data cooperative?
Our modern, technologised society exists on data. Our everyday interactions leave a trace that is often invisible and unknown to us. The services that we interact with, the daily transactions that we make and the way we negotiate through our everyday generate data, building a picture of who we are and what we do. This data also enables aggregators to predict, personalise and intervene seamlessly and sometimes invisibly. Even for the most technically literate, keeping track of what we do and don’t give away is daunting. There is a need to stem the unbridled exploitation of personal data by both public and private organisations, to empower individuals to have more control over the data they create, and for people to have more of a say in the services that are built upon and informed by this data. Data cooperatives may help rebalance the relationship between those that create data and those that seek to exploit it whilst also creating the environment for fair and consensual exchange.
Cooperation for the creation of common good is a widely understood concept and in a world where value is often extracted by large organisations with opaque processes and ethics, they are starting to be seen as a way of reinvigorating value transactions within smaller, often under-represented communities of interest, and between organisations that create and use data.
Finding already existing data cooperatives is not easy. Examples such as The Good Data which allow people to control data flow at a browser level and the Swiss-based Health Bank are two known examples, and as the principles of data custodianship for social good become understood there is little to challenge that more would develop.
There are organisations that exhibit cooperative traits but may not themselves be cooperatives or co-owned structures. Open Street Map (OSM) is a resource that is essentially created and administered by the community, with the underlying motivation for OSM being for common good. The open source movement was cited as being the largest example of technological cooperativism, although the largest platform on which cooperative endeavour is expressed (GitHub) is a privately owned Silicon Valley entity.
There are many versions of coops. These have traditionally come out of the needs of the membership who subscribe to them. Structures of these cooperatives have generally been organised around a single class of member – workers, producers, consumers, etc. The single class structure, although creating an equitable environment for those that are members of a particular coop, can tend towards self interest and although they may be bound by the notion of the common good, the mechanism for the creation of the common good or commons is seldom explicit.
Internationally the creation of new forms of cooperatives that explicitly express the development of common good across multiple classes of stakeholders are more abundant. Social co-ops in Italy and Solidarity coops in Canada often provide services such as healthcare, education and social care. Could these types of cooperative be more relevant for our networked and distributed age?
Michel Bauwens founder of the P2P Foundation talks about the creation of these new forms of cooperatives, and how it is necessary to wean ourselves off the notion of cooperativism as a means of participation in a capitalist economy, to one that builds a commons both material and immaterial. This commons would be subscribed to by other commons creating entities and licenced to non-commons creating organisations.
Would a data cooperative necessarily adopt these newer forms of distributed and commons creating structure? There appears to be a consensus that commons creating, multi-stakeholders cooperatives are positive, but is this model easily understood? And can individual circumstances especially when dealing with communities based around sensitive issues, create an environment for sharing beyond a single class? A single class cooperative may seem to be a simpler, immediate solution for a community of people who have specific needs and issues and where strong trust relationships need to be maintained.
It is understood that personal data empowerment is not just about selling data to the highest bidder and any organisation acting as a data intermediary would need to be able to accommodate the complexity of reasons as to why people donate or give. Even though economic gain might seem an obvious attraction for people, motivations are more complex and often financial incentives can be detrimental to the process of participation and giving.
From The Good Data’s perspective data cooperatives should split the data layer from the service layer. The cooperative should control the data layer and enable/choose others to build the service layer as it is likely that data cooperatives would not have the capacity or expertise to create end to end solutions.
The structure of the data cooperative should encourage maximum participation and consent, although 100% participation and engagement is unrealistic. Flat structures have a tendency towards hierarchy through operational efficiency and founder endeavour. Even though the majority of members align with the aims of the cooperative, it doesn’t necessarily mean that they want to be constantly encumbered with the burden of governance.
A certain pragmatism and sensitivity needs to be adopted to the model of cooperative that a group may want to adopt. There are examples of communities maintaining informality to enable themselves to be less burdened by expectation, to maintain independence or minimise liability. Advocates of data cooperatives need to be sensitive to this.
Data Cooperatives need to have a simplicity of purpose. What do they do, for whom and why? Is the building of data cooperative around particular issue enough? Or do we need to take a look at the data cooperative as being a platform that allows the representation of personal data across a broader portfolio of interests?
Although the there is a tendency to see a data cooperative as being a mechanism to generate bulk, high worth data that can then be used to draw down value from large organisations, a more appropriate application might be in enabling a smaller community of interest, perhaps around a particular health condition, to draw down certain services or to negotiate for a better deal. The notion of withholding data from public service providers might be seen to be detrimental to the delivery of that service, but it could also create a more balanced decision making process. It is also known that many providers of service collect more data than they actually need for the delivery of that service. Empowering people to take more control over their data may create a situation where the practice of excessive data gathering is curtailed.
Ideally for a data cooperative to be most effective, the level of data literacy amongst members would need to be raised so that members could make more informed decisions about what data was given away or used. This ideal might be difficult to achieve without a broader awareness raising campaign about the power of personal data. The revealing of the ways that security agencies collect data by Edward Snowdon was sensational and although it highlighted that we unintentionally give away a lot, it didn’t build a wider popular discourse around protection and usage of personal data.
Raising the level of data awareness amongst cooperative members would create more informed decision making, but this task would need to be delivered in a nuanced way and ultimately some people might not engage. This could be the case with people who are dependant on service and have little power or real choice as to their decisions.
For a data cooperative to represent its membership and control the flow of data it needs to have legitimacy, know and understand the data assets of the membership, and have the authority to negotiate with those data assets on the members behalf.
Decisions around data sharing and understanding the potential consequences are difficult and complex. As an intermediary the cooperative would need to ensure that individual members were able to give informed consent. We have to know what we have and what it does for us, in order to utilise it.
Mechanisms of consent
There already exist mechanisms for the creation of consent. These by and large create the environment for proxy voting in decision making processes. A mechanism such as Liquid Feedback – popularised by the Pirate Parties, where an individual bestows voting rights to a proxy who aligns to their position, is a representative democracy process, the ‘liquid’ element allows proxy rights to be revoked at any point in the decision making process. Other mechanisms might follow along the lines of the Platform Preferences initiative developed by W3C, which sought to create privacy policies that could be understood by browsers which was ultimately considered too difficult to implement. A potentially easier solution might work on the basis of preset preferences based on trusted individuals or the creation of archetype or persona based preferences that people can select.
Can one organisation be representative of the broader range of ethical positions held within a membership structure? For practical reasons the data cooperative might have a high level ethical policy but individuals within the cooperative are empowered to make data sharing choices based on their personal ethical standpoint. This could be enabled by proxy or preset data sharing preferences.
The alternative to having data coops with high level ethical aims that also represent multiple ethical standpoints could be to have smaller federated or distributed niche organisations where individuals could allow the organisation to use their data on their behalf.
Right to personal data
In order for an individual to allow an organisation to use data on their behalf we need to have control over our individual personal data. Legislation in many countries offers a framework about how personal data is used and shared amongst organisations, but these don’t necessarily create a mechanism that allows users to retrieve their data and use it for other purposes. Often within the End User License Agreement (EULA) or Terms of Service that come with software products an individual may find that their data is inexorably tied up with the function of the service. A function of a data cooperative might be to help individuals understand these agreements and add to the commons of knowledge about them.
How would the argument for greater individual data rights be made when service providers see that personal data mediated through their product part of their intellectual property? Work has been done through the midata initiative and the development of personal data passports – where individuals grant rights to organisations to use the data for delivery of service. UK Government has supported this initiative, but has backed away from underpinning the programme with changes in legislation. This lack of regulatory enforcement may limit the efficacy of any initiative that seeks to grant individuals’ rights and agency over their data.
The development of a personal data licence may aid the creation of data cooperatives but the form of the licence and the mechanism for compliance might be weakened without an underpinning regulatory framework. At present there is a certain level of cynicism around voluntary codes of practice where power imbalances exist between stakeholders. The lack of legislation might also create a chilling effect on the ability of data cooperatives to gain the trust of their membership.
Data empowerment is promoted in Project VRM (Vendor Relation Management) developed by Doc Searls at Harvard University. The ability for an individual to have control over their data is an integral component of developing an open market for personal data-based services and theoretically giving more choice. The criticism voiced about midata and Project VRM is that they are too individualistic and focus on economic rather than social transaction with ethical aims. Even with these criticisms the development of a market logic to enable large organisations to engage with the process of individual data empowerment might be beneficial for the long term aims of data cooperatives and for the development of innovative service for social good.
Ultimately if the individual isn’t able to have control over their data or the data derived from them then the function of the cooperative would be inhibited.
Creating value from data
It could emerge that scale could dictate the eventual form of the data cooperative. Many potential clients of a data cooperative might require this, which would see the need to build a data asset that contained upwards of 500,000 users. The Good Data cooperative’s aim is to achieve this scale to become viable.
A challenge that all data cooperatives would face would be how they maintain a relationship with their membership so that service based upon, or value that is extracted from the data is not subject to unforeseen supply-side problems. If a data cooperative represented its membership and entered into licensing relationships with third party organisations on behalf of its membership, what would be reasonable for a client to expect, especially if individual members had the rights to revoke access to data at anytime? With larger scale data cooperatives this may not be too much of a problem as scale has the potential to damp down unforeseen effects. The Good Data proposes to get around these issues by only holding data for a limited amount of time essentially minimising disruptions in data supply by creating a buffer.
Smaller scale data cooperatives, especially ones that are created around single issues may have difficulty in engaging in activity that requires service guarantees. Developing a mechanism for federation, cumulatively creating data at scale might be a potential solution, but creating a federated system of consent may be more difficult to achieve. As suggested previously economic activity might be a low priority for such organisations where the main purpose might be to represent members and create the environment for informed service decisions.
The challenge facing federated data cooperatives and how they interact is undefined. It has been noted that building distributed and federated systems is difficult, and that centralised systems persist due to operational efficiencies. The advent of alternative forms of ‘block chain’ transaction could enable distributed organisations to coexist using ‘rules based’ or algorithmic democracy. But alternative transaction systems and currencies often face challenges when they interface with dominant and established forms of currency and value.
How data cooperatives could practically use these new mechanisms for exchange needs to be explored.
“The cooperative movement and cooperative enterprises are in the midst of a revival, even as some of their long-standing entities are failing. This revival is part of an ebb and flow of cooperativism, that is strongly linked to the ebb and flow of the mainstream capitalist economy. After systemic crisis such as the one in 2008, many people look at alternatives.
Yet, we can’t simply look at the older models and revive them, we have to take into account the new possibilities and requirements of our epoch, and especially of the affordances that digital networks are bringing to us.
Here are a few ideas from the ‘peer to peer’ perspective, as we develop them in the context of the Peer to Peer Foundation.
First, let’s start with a critique of the older cooperative models:
Yes coops are more democratic than their capitalist counterparts based on wage-dependency and internal hierarchy. But cooperatives that work in the capitalist marketplace tend to gradually take over competitive mentalities, and even if they would not, they work for their own members, not the common good.
Second, coops are generally not creating, protecting or producing commons. Like their for-profit counterparts, they most often work with patents and copyrights, doing their part in the enclosures of the commons.
Third, coops may tend to self-enclose around their local or national membership. Doing this, they leave the global arena open to the domination by for-profit multinationals.
These characteristics have to be changed, and can be changed today.
Here are our proposals.
1. Unlike for-profits, the new cooperatives must work for the common good, a requirement that must be included in their own statutes and governance documents. This means that coops can’t be for-profit, they have to work for social goods, and this must be inscribed in their statutes. Solidarity cooperatives, already active in social care in regions like Northern Italy and Quebec, are a important step in the right direction. In the current capitalist market model, social and environmental externalities are ignored, and left to the external state to regulate. In the new cooperative market model, externalities are statutorily integrated and a legal obligation.
2. Unlike co-ops that draw their membership from a single class of stakeholders, cooperatives must include all stakeholders in their management. Coops need to be multi-stakeholder governed. This means that the concept of membership must be extended to these other types of memberships, or that alternatives to the membership model must be sought, such as the newly proposed FairShares model.
3. The crucial innovation for our times is this though: Cooperatives must (co-)produce commons, and these commons must be of two types.
a. The first type is immaterial commons, i.e. using open and shareable licenses to that the global human community can build on cooperative innovations and in turn enrich them. At the P2P Foundation, we have introduced the concept of Commons-Based Reciprocity Licenses. These licenses are designed to create coalitions of ethical and cooperative enterprise around the commons they are co-producing. The key rules of such licenses are: 1) the commons are open to non-commercial usage 2) the commons are open to common good institutions 3) the commons are open to for-profit enterprises who contribute to the commons. The exception introduced here is that for-profit companies that do not contribute to the commons have to pay for the use of the license. This is not primarily to generate income, but to introduce the notion of reciprocity in the market economy. In other words, the aim is to create an ethical economy, a non-capitalist market dynamic.
b. The second type is the creation of material commons. We are thinking here of the creation of commons funding for the manufacturing equipment for example. Following proposals by Dmytri Kleiner, cooperatives could float Bonds, to which all cooperative members (of all other coops in the system) could contribute, creating a commons fund for manufacturing. The coop seeking funds would obtain the machinery without conditions, but the owners would be all the cooperators, which would gradually build up a basic income from the income generated by the fund.
4. Finally we must address the issue of global social and political power. Following the lead of David de Ugarte and the lasindias.net global cooperative, we propose the creation of global phyles. A phyle is a global business-ecosystem that sustains commons and their community of contributors. Here is how this would work. Imagine the existence of a global open design community for the design of open agricultural machines (or any other product or service you can imagine). These machines are effectively manufactured and produced in a system of open and distributed microfactories, close to the of need. But, all these micro-coops would not exist in a isolated fashion, merely connected through the global and ‘immaterially-focused’ global open design community. Instead, they would also be interconnected through a global cooperative uniting the microfactories. The combination of such global phyles would be the seed for a new form of global and social political power, representing the global ethical economy. Ethical entrepreneurial coalitions and phyles can engage in post-market and post-market coordination of physical production, by moving towards open accounting and open supply chain practices.
In summary, though traditional cooperatives have played an important and progressive role in human history, their format needs to be updated to the networked era by introducing p2p and commons producing aspects.
Our recommendations for the new era of open cooperativism are:
1. That coops need to be statutorily (internally) oriented towards the common good
2. That coops need to have governance models including all stakeholders
3. That coops need to actively co-produce the creation of immaterial and material commons
4. That coops need to be organized socially and politically on a global basis, even as they produce locally.”
In 2002 I described United Diversity as “a member owned and stakeholder governed network of mutual advantage.” In truth, it was aspirational. At the time, the flexible off-the-shelf legal structures and open source tools needed to make such a network a reality simply didn’t exist. Now they do. Co-ops that combine best practices from the international co-operative movement with best practices from the open source software and hardware communities are now possible. Soon anyone will be able to set up an Open Co-op and invite all their stakeholders to help finance, govern and organise the co-op online.
Imagine transparent, democratic and decentralised organising for everyone. A society in which anyone can become a co-owner of the organisations on which they, their family and their community depend. A world where everyone can participate in all the decisions that affect them. This is the world United Diversity and the emerging network of people working on the legal structures and open source tools that enable Open Co-ops are working towards. Here I share some of the projects and ideas that have inspired us on our journey, and some of the legal structures and tools that are now available to put our vision into practice.
The Open Organisations Project
Out of a desire by the Indymedia UK London Working Group to go beyond both the formal top-down power structures found in governments and corporations and the informal ‘Tyranny of Structurelessness’ found in many voluntary and activist groups, The Open Organisations Project emerged. Their goal was “to explain how to set up and maintain transparent, accountable and truly participative communities” and they came up with a useful set of six process and eight functional rules together with some basic guidelines for how to implement them. At the time (2002), it was the clearest guide to organising openly we’d found and we still point people to it today.
A New Way to Govern and Gaian Democracies
Two books, A New Way to Govern: Organisations and Society after Enron by Shann Turnbull (2002), and Gaian Democracies: Redefining Globalisation and People-Power by John Jopling and Roy Madron (2003) were both very influential on our thinking. They introduced us to the principles behind Spain’s huge co-operative network Mondragon, and other large scale business with innovative organisational structures such VISA International and Semco in Brazil.
In A New Way to Govern Turnbull summarised the terminal flaws of command and control hierarchies: the tendency of centralised power to corrupt; the difficulty of managing complexity; and the suppression of “natural” — human —checks and balances. In their place he proposed organisations which are able to “break complexity down into manageable units, and decompose organisational decision-making into a network of independent control centres.” In short, his thesis argued that command and control hierarchies must be replaced by “network governance” and that where this includes stakeholders — not merely staff but customers, communities, suppliers or distributors — a whole new dimension of economic, social and political benefit opens up.
Viable System Model (VSM)
The chapter about network governance in Gaian Democracies explained Arthur Koestler’s term ‘holon’ (from the Greek ‘holos’ meaning ‘whole’, and the suffix ‘on’, meaning ‘particle’ or ‘part’), which he devised to describe entities that are simultaneously self-contained wholes made up of parts, and themselves a part of a larger whole. Stafford Beer used the term ‘viable system’ to describe the same thing and outlined some of their properties in the VSM. In short, the model says that in order to be viable (i.e., able to autonomously adapt and survive in response to a changing environment) a system must have the following five sub-systems:
System 1: Interacting operational units. Think organs in a body, or players in a team.
System 2: Responsible for stability and conflict resolution between operational units.
System 3: An ‘Internal Eye’ optimising and generating synergies between operational units.
System 4: An ‘External Eye’ allows strategies and plans to adapt to a changing environment.
System 5: Where ultimate authority lies and is responsible developing policy.
Bettermeans and The Open Enterprise Manifesto
In April 2010 a project called Bettermeans “formed to promote the values of openness, transparency, autonomy, contribution-based-rewards (meritocracy), democracy, integrity, and values-oriented, purpose-driven work” released The Open Enterprise Manifesto. It was a familiar story: replace “the command and control hierarchy” with “collaboration and open participation;” create organisations “more like living dynamic networks, and less like pyramids;” plus the standard mentions of Linux, Wikipedia, Mondragón and Visa to demonstrate how aspects of the model had already been shown to work at scale. Bettermeans were trying to bring these various aspects together in a single cohesive model, and they made a pretty good stab at building the necessary tools to make such a model widely available and adoptable.
Enspiral is made up of three parts: The Enspiral Foundation, Enspiral Services and Startup Ventures. I’d say they’re the best current example of an Open Co-op, but how they actually describe themselves is as “a virtual and physical network of companies and professionals working together to create a thriving society” and as an “experiment to create a collaborative network that helps people do meaningful work.” A core part of their strategy is to open source their model. In short, not only are they doing almost exactly what United Diversity wants to do — they’re also building the open source tools actually needed to do it!
The Enspiral Foundation is the charitable company at the heart of the Enspiral network.
It’s the legal custodian of assets held collectively by the network, and the entity with which companies and individuals have a formal relationship. Decisions are made using Loomio and budgets are set using Cobudget (see below).
A network of professionals work together in teams to offer Enspiral Services, a range of business services under one roof. By default members pool 20% of their invoices into a collective bucket, 25% of which goes to the Foundation. Loomio and Cobudget are then used to decide how to spend the rest. For Startup Ventures, Enspiral works with social entrepreneurs to launch start-ups who then support the work of the Foundation, and Enspiral as a whole, through flexible revenue share agreements: ventures choose their own contribution rate, usually around 5% of revenue.
In some countries there are a fixed set of legal structures that co-operatives must use. Here in the UK we’re more flexible. We do have legal structures specifically designed for co-operative and community enterprise: Co-operative Societies and Community Benefit Societies — but you don’t have to use them; off-the-shelf co-operative model rules for a wide variety of other structures are readily available. That said, pretty much all of the UK co-operative and community enterprises that most inspire us at United Diversity, i.e., those creating community-scale, community-owned renewably-powered infrastructure of all kinds, have chosen to incorporate as societies — and for good reason.
Societies have a number of special attributes that make them particularly suitable for community investment. A big reason most community land trusts, community energy projects, community farms, pubs and shops and so on. register as societies is because doing a Community Share offer is the best way to finance such projects. In recent years such Community Share offers have been growing exponentially and there is now a Community Shares Unit that offers advice and guidance on how to do it.
Rather than being organised around a single class of members the way that most co-operatives are, a multi-stakeholder co-operative is any co-op that draws its membership from two or more different classes of stakeholders. After two decades of local experimentation, Italy was the first country to adopt a multi-stakeholder statute in 1991. Over 14,000 ‘social co-ops’ now exist across Italy and provide social care, health and educational services to over 5 million people. In Quebec, home to one of the most productive and vibrant co-operative development sectors in the world, multi-stakeholder co-ops are now the fastest growing type of co-op, with more than 50% of all new co-ops opting to register what they refer to as ‘solidarity co-ops.’ The movement is just getting here in the UK, but there are now over 20 multi-stakeholder co-ops who have incorporated using the Somerset Rules.
Launched in 2009, the Somerset Rules were one of the UK’s first set of model rules for a multi-stakeholder co-op, and they’re arguably still the best. Packed full of best practice gleaned from decades of co-operative development experience, they’re structured to closely follow co-op principles, written in relatively plain English, and are cleverly drafted to allow for a wide range of different configurations. You can define the percentage of overall control each stakeholder group has. They are also ‘social accounting ready’ and are designed to enable the widest range of options for financing. In 2012 they were fully revised and overhauled and a version for use as a Community Interest Company limited by guarantee was developed. In May 2014 a Community Benefit Society version was created and we’re now in the process of adopting them for the United Diversity equivalent of the Enspiral Foundation.
FairShares is a new brand and model for self-governing social enterprises operating under either Company or Co‑operative Law. It offers a unique approach to enterprise ownership, governance and management through its recognition and integration of founders, producers, employees, customers, service users and investors. At the heart of the FairShares model is a definition of social enterprise based on: Specifying the social purpose(s) and evaluating the social impact(s) of trading activities; conducting ethical reviews of product/service choices and production/consumption practices; and promoting socialised and democratic ownership, governance and management by primary stakeholders. In addition, all intellectual property created by FairShares Enterprises and their members are managed as an Intellectual Commons using Creative Commons licences. This all sounds perfect for Open Co-ops and so we’re really looking to learning more at Inaugural FairShares Conference in Sheffield on July 1st.
Microgenius (and other funding tools)
Originally started by Cambridge-based entrepreneur Emily Mackay, Microgenius is the UK’s first platform for community share offers and is now part of the Community Shares Unit. Societies can also sell shares via Crowdfunder and BuzzBnk, and can advertise share issues on Ethex, the Trillion Fund, and on Shares.coop — where the widest range of live Community Share Offers in the UK are listed. Co-operative Companies Limited by Shares can do equity crowdfunding on Crowdcube (which also powers Microgenius) and Seedrs.
Open source platforms specifically created to help open and/or co-operative projects include: Goteo for crowdfunding the commons; Open Funding and Bountysource for cofunding free software; Gittip for giving small weekly cash gifts to people you love and are inspired by; Snowdrift, a monthly matched patronage system; and Coopfunding.net, a wordpress powered crowdfunding platform for co-ops in Spain (we’ve got plans for something similar in the UK). Catarse, Selfstarter and tilt are other open source options, and there are numerous bitcoin powered platforms out there, too (e.g. Swarm).
One Click Co-op
One Clicks Orgs, a social enterprise whose strapline is “Legal Structures and Group Voting Made Easy,” created the One Click Co-op in partnership with Co-operatives UK and NESTA. Launched in June 2013 and approved by UK regulators it is the first fully-online co-operative structure in the world. The open source platform permits members to contribute agenda items, browse archived minutes and participate in votes electronically. It’s pretty awesome, but having been built on a relative shoestring also pretty basic. Only Co-operatives UK’s multi-stakeholder co-operative rules are supported and you can’t, for example, the balance the interests of stakeholder groups by giving them different proportions of overall control (like you can with the Somerset Rules).
Loomio — a free and open source tool for collaborative decision-making — is what happened when Enspiral met Occupy. Enspiral were committed to being a flat organisation, empowering employees to be autonomous and involved in leadership and decision making. But without the right platform, the overheads of engaging lots of people made it hard to deliver on this grand vision. In practice, only a few people were making most of the important decisions. Similarly, Occupy activists were finding it hard to make consensus decisions with large groups of people. Loud voices dominated and people with less time to commit to the process were being marginalised. They were missing out on the power of including a truly diverse range of perspectives. Together they developed Loomio.
Cobudget is another open source app being developed by Enspiral. It works like this: each month contributions to collective funds are published. Everyone can see who contributed what and how much money is in the budget. Basic core expenses (previously collectively agreed on Loomio) are subtracted and what’s left is the discretionary budget. Each person or company retains the right to allocate their part of discretionary funds and anyone in the network can start a “bucket” — a proposal to do work that requires funding. They write up a proposal making their case for why the work they want to do will benefit everyone and why they are the right person to deliver the project. Everyone then considers the buckets and decides which ones to “fill” with their portion of the discretionary budget. If people collectively feel like a project is a good use of resources, it will get funded. If there are critical budgeting priorities taking precedence, “nice to have” projects won’t get any funds that round. Funders can split up their allocations as they like, or put it all in one bucket. In aggregate, the result is a budget that reflects the collective priorities of the group, determined in proportion to real stakeholding and in the context of the big picture goals. The entire process takes place transparently.
The Open App Ecosystem
Building on the work of Loomio and Cobudget the Open App Ecosystem is an Enspiral project to develop suite of integrated and open sourced apps which support transparent, democratic and decentralised organising. The aim is for the software to act as a delivery mechanism for cultural viruses which decentralise money, information and control and promote happiness, empowerment and wellbeing throughout an organisation. They also have the side effect of helping organisations become more efficient, resilient and adaptable. Bring it on.
Josef Davies-Coates helps people discover, contribute to and replicate intelligent responses to climate, energy and economic uncertainty. He is the founder of United Diversity @jdaviescoates
UPDATE: The wonderful people over at Guerrilla Translation have now transcribed this must listen podcast into both Spanish and English. I’ve pasted their English transcription below this post for good measure.
KMO: You are listening to the C-Realm Podcast, I am your host, KMO, and I am joined from Quito, Ecuador, by Dmytri Kleiner, Michel Bauwens, and John Restakis, so I’ll introduce you each individually. Dmytri Kleiner, this is our second conversation, although his first appearance on the C-Realm Podcast. He is a venture communist and the author of the Telekommunist Manifesto. Dmytri, welcome to the C-Realm Podcast.
Dmytri: Thank you, KMO.
KMO: Say just a little bit more about yourself. Don’t say anything about what brings you to Ecuador, though, I’ll ask you about that in a moment.
Dmytri: I’m a member of the collective called Telekommunisten. We make artworks that investigate the political economy of information, and especially the ways the Internet and social media has developed. As part of doing that, there’s a lot of writing that goes along with it, including the Telekommunist Manifesto, which looks at the history of copyright, and the history of networks and communication platforms from a materialist perspective.
John: Right, I have been involved with the cooperative movement, primarily in Canada, over the last 18, 19 years or so. Up until this summer I was executive director for the BC Cooperative Association, and I have been involved with writing and lecturing around cooperative economies and globalization. I’ve done a lot of work around co-op development, both in Canada and internationally, paying a lot of attention to the evolution of the cooperative model, for the creation of a new kind of market as a response to the failed neoliberal paradigm that we’re living through at the moment.
KMO: Michel, let’s start with you. You are all three in Quito, Ecuador, as invited speakers for a conference there. If you would, say a little bit about the conference, and why the conference organizers invited you in particular, what you bring to the table for this discussion.
Michel: John and I are working on something called the FLOKSociety Project. FLOK means free, libre, open knowledge society. It’s based on a speech that Pres. Rafael Correa gave some months ago where he asked young people to work and fight for open, commons knowledge-based society. Three official organisms signed an agreement, the Ministry of Knowledge, and the SENESCYT which is like an open innovation in science secretariat, and the postgraduate University of the state, called EIAN. These three asked us to provide a transition program to move Ecuador towards a commons-based model. I’m the research director and John Restakis is a research stream coordinator about institutional innovation. The other thing is the conference which you asked about, called Minga. It’s about technological sovereignty. Now that we know that everything we do is monitored and surveilled, especially by British and American intelligence, the questions are, is there anything we can do about it, is there anything we can do to preserve our privacy, protect our communications from systematic spying? And both Dmytri and I are speaking in the conference. I’m introducing the FLOK society to this public of quite committed free software activists here in Ecuador. Dmytri, do you want to add something about the conference?
Dmytri: Sure. I’m here as a member of the free software community. I’m a developer, and have been for a long time. I introduced a critical analysis within the community which often feels that technology can solve all our problems. There is a very common attitude of the free software community that all we need to do is code better software and we can overcome things. So the reason we can’t defeat Facebook is that we simply haven’t coded a better thing. I don’t understand the problem in those ways, I understand the problem politically and economically, in that the modes of communication we use are very tightly coupled with the modes of production that finance them, so I was invited here to express that opinion in this group.
Michel: John do you want to add anything?
John: Just to say that, I’m part of the research team that Michel just outlined for the FLOK society project. I’m not actually participating in this conference, I’m not a techie by any means and I’m having a hard time just following the conversation when I go to one of those things. I’m focused on the policy formation around this transition to a new, open knowledge and commons-based economy, and that’s the research work I’m doing here. Perhaps I can pitch this back to Michel, and ask if you can provide the framework for the conversation we’re going to have, kind of an echo of what we talked about the other day.
Michel: I like to start with outlining the issue, the problem around the emergence of peer production within the current neoliberal capitalist form of society and economy that we have. We now have a technology which allows us to globally scale small group dynamics, and to create huge productive communities, self-organized around the collaborative production of knowledge, code, and design. But the key issue is that we are not able to live from that, right?
The situation is that we have created communities consisting of people who are sometimes paid, sometimes volunteers, and by using open licenses, we are actually creating commonses – think about Linux, Wikipedia, Arduino, those kinds of things. But what is the problem? The problem is I can only make a living by still working for capital. So, there is an accumulation of the commons on the one side, we are effectively producing a commons, but we don’t have what Marx used to call social reproduction. We cannot create our own livelihood within that sphere. The solution that I propose is related to the work of Dmytri Kleiner – Dmytri proposed some years ago to create a peer production license. I’ll give you my interpretation of it; you can only use our commons if you reciprocate to some degree. So, instead of having a totally open commons, which allows multinationals to use our commons and reinforce the system of capital, the idea is to keep the accumulation within the sphere of the commons. Imagine that you have a community of producers, and around that you have an entrepreneurial coalition of cooperative, ethical, social, solidarity enterprise.
The idea is that you would have an immaterial commons of codes and knowledge, but then the material work, the work of working for clients and making a livelihood, would be done through co-ops. The result would be a type of open cooperative-ism, a kind of synthesis or convergence between peer production and cooperative modes of production. That’s the basic idea. I think that a number of things are happening around that, like solidarity co-ops, and other new forms of cooperative-ism. I would like John to briefly explain what that means.
John: First I should just mention that as I said earlier, I’ve been involved in the co-op movement, both in Canada and internationally for the last 17 or 18 years or so, but I’m relatively new to what I am calling the new commons movement. It’s largely through the interaction with Michel and others from that sphere that I’m becoming aware now of how extensive and vibrant this new commons movement is. So, the question for me has always been how to reimagine and reinterpret the cooperative model as a response to the current crisis, and beyond, that we’re living in at the moment.
Historically, the cooperative movement goes back long way, and it’s achieved enormous successes all around the world, both in the North and South. But it hasn’t had much of a direct connection to this emerging commons movement, which shares so many of the values and principles of the traditional cooperative movement. One of the issues I’m interested in addressing is how to bridge this gap between the cooperative movement internationally, and the international commons movement. There is very little dialogue between those two. I think there is a need for convergence between the traditional historical cooperative movement in this new form of commons, which is finding its voice now as a new way of thinking about social relationships, production relationships, developing new kinds of economies, as Michel just outlined.
This reinterpretation of the cooperative model as a particular form can add a lot of stability and strength and power to the commons movement. As far as I can see, it’s still largely a technology movement. There’s also a lot of peer-to-peer work going on, but it’s not very well versed around issues like cooperative organization, formal or legal forms of ownership, which are based on reciprocity and cooperation, and how to interpret the commons vision with a structure, an organizational structure and a legal structure that actually gives it economic power, market influence, and a means of connecting it to organizational forms that have durability over the long-term.
Michel: I’d like to add something. I experience this on a human level almost daily. The young people, the developers in open source or free software, the people who are in co-working centers, hacker spaces, maker spaces. When they are thinking of making a living, they think startups. They have been very influenced by this neoliberal atmosphere that has been dominant in their generation. They have a kind of generic reaction, “oh, let’s do a startup”, and then they look for venture funds. But this is a very dangerous path to take. Typically, the venture capital will ask for a controlling stake, they have the right to close down your start up whenever they feel like it, when they feel that they’re not going to make enough money. They forbid you to continue to work in the same sector after your company has failed, and you have a gag order, so you don’t even have free speech to talk about your negative experience. This is a very common experience. Don’t forget that with venture capital, only 1 out of 10 companies will actually make it, and they may be very rich, but it’s a winner-take-all system.
There is a real lack of knowledge within the young generation that there are other forms of enterprise possible. I think that the other way is also true. A lot of co-ops have been neo-liberalizing, as it were, have become competitive enterprises competing against other companies but also against other co-ops, and they don’t share their knowledge. They don’t have a commons of design or code, they privatize and patent, just like private competitive enterprise, their knowledge. They’re also not aware that there’s a new way of becoming more competitive through increased cooperation of open knowledge commons. This is the human side of it, and we need to work on the knowledge and mutual experience of these two sectors. Both are growing at the same time; after the crisis of 2008, we’ve had an explosion of the sharing economy and the peer production economy on the one side, but also a revitalization of the cooperative sector. Before Dmytri intervenes, I would like John to talk about the solidarity co-ops, and how that integrates the notion of the commons or the common good in the very structure of the co-op.
John: Historically, cooperatives have been primarily focused around providing support and service to the members. Cooperatives, which are basically a democratic and collective form of enterprise where members have control rights and democratically direct the operations of the co-op, have been the primary stakeholders in any given co-op – whether it’s a consumer co-op, or a credit union, or a worker co-op. That has been the traditional form of cooperatives for a long time now. Primarily, the co-op is in the service of its immediate members. That has changed over the last 15 years or so, particularly in the field of the provision of social care.
Social co-ops emerged in the late 70s in Italy as a response to a market failure within public services in Italy. Groups of families or users of social services, primarily originally from within a community of people with disabilities, decided to organize cooperatives as a better way of designing and providing services to themselves. This is a very different model from the state-delivered services to these people. What was really fascinating about the social co-ops was that, although they had members, their mission was not only to serve the members but also to provide service to the broader community. And so, they were communitarian, community service organizations that had a membership base of primary users of that service, whether it was healthcare, or help for people with drug addictions, or whatever.
These social co-ops have now exploded in Italy. I think they have taken over, in a sense, the provision of social care services in many communities under contracts to local municipalities. In the city of Bologna, for example, over 87% of the social services provided in that city are provided through contract with social co-ops. These are democratically run organizations, which is a very different model, much more participatory, and a much more engaged model of designing social care than the traditional state delivered services. The idea of co-ops as being primarily of interest in serving their own immediate membership has been expanded to include a mandate for the provision of service to the community as a whole. This is an expansion of this notion of cooperatives into a more commons-based kind of mission, which overlaps with the philosophy and values of commons movement. The difference, however, is that the structure of social co-ops is still very much around control rights, in other words, members have rights of control and decision-making within how that organization operates. And it is an incorporated legal structure that has formal recognition by the legislation of government of the state, and it has the power, through this incorporated power, to negotiate with and contract with government for the provision of these public services. One of the real strengths of the cooperative form is that it not only provides a democratic structure for the enterprise – be it a commercial or social enterprise – but it also has a legal form that allows it to enter into contract and negotiate legal agreements with the state for the provision of public services. This model of co-op for social care has been growing in Europe. In Québec they’re called Solidarity co-ops, and they are generating an increasing portion of market share for the provision of services like home care and healthcare, and it’s also growing in Europe.
So, the social economy, meaning organizations that have a mutual aim in their purpose, based on the principles of reciprocity, collective benefit, social benefit, is emerging as an important player for the design and delivery of public services. This, too, is in reaction to the failure of the public market for provision of services like affordable housing or health care or education services. This is a crisis in the role of the state as a provider of public services. So the question has emerged: what happens when the state fails to provide or fulfill its mandate as a provider or steward of public goods and services, and what’s the role of civil society and the social economy in response? Social co-ops have been part of this tide of reaction and reinvention, in terms of civic solutions to what were previously state-designed and delivered public goods and services. So I’ll leave it at that for the moment, but it’s just an indicator of the very interesting ways in which the co-op form is being reimagined and reinvented to respond to this crisis of public services and the changing role of the state.
Michel: Before introducing Dmytri, I’d like to reiterate one of the key problems that maybe Dmytri’s proposals will be able to solve. John has been explaining public services, but what about material production? This is where the issue arises: we have commonses of knowledge, code and design. They’re more easily created, because as a knowledge worker, if you have access to the network and some means, however meager, of subsistence, through effort and connection you can actually create knowledge. However, this is not the case if you move to direct physical production, like the open hardware movement.
What we see in the free software movement is that there are democratic foundations like the Apache foundation or the Gnu foundation, which means that the community has its own organization. In hardware, we don’t see that, because you need to buy material, machines, plastic, metal. Some people have called the open hardware community a “candy” economy, because if you’re not part of these open hardware startups, you’re basically not getting anything for your efforts. Dmytri’s offering us a vision of a commons of material means of production which I’d like him now to explain. He uses what I think is a bit provocative as a concept, the concept of “venture communism”. You think about venture, you think about venture capital, right? Dmytri, can you tell us what you mean?
Dmytri: In the 90s, I was part of the anarchist-communist, anti-globalization movement. At the same time I was also making a living as an IT consultant in a very dotcom-fueled environment. I was a really big believer in what we now call peer production. We didn’t have these terms back then, but what we now call peer production, which attempts to describe the ways that people cooperate on networks, or within free software. I envisioned this transforming our social relationships worldwide, and achieving the age-old dreams of anarchist-communism. But that all came crashing down in the early 2000s, with the dotcom bust, and the George Bush administration’s massive crackdown on protests, from Seattle, Québec City, Miami. All of a sudden, the unstoppable-ness of our movement seemed to be stopped, it seemed to be something that I couldn’t believe in anymore.
I quickly realized that this network that we were building – the Internet and the free software community – was largely enabled by our jobs for the dotcom bubble, for capitalism. It was being funded by venture capital. Realizing that venture capital wouldn’t fund the anarchist-communist social relationships that we believed were embedded in these platforms, it became clear that we needed something else. So I called that something else “venture communism”, with the intention to study what that might look like, and how we might achieve it. I originally encountered Michel after seeing some talks by Benkler and Lessig at the Wizard of OS 2 4, around 2004-2005 in 2006, and I wrote an essay criticizing that from a materialist perspective, it was called “the creative anti-commons and the poverty of networks”, playing on the terms that both those people used.
The basis of the criticism in both cases was that they were describing peer production in a way that was very different from our conception. We didn’t have this term, this term came from Benkler, but we were talking about what we thought was the same thing. They conceive of peer production, especially Benkler, as being something inherently immaterial, a form of production that can only exist in the production of immaterial wealth. From my materialist point of view, that’s not a mode of production, because a mode of production must, in the first place, reproduce its productive inputs, its capital, its labor, and whatever natural wealth it consumes.
From a materialist point of view, it becomes obvious that the entire exchange value produced in these immaterial forms would be captured by the same old owners of materialist wealth that existed before, after, and during. This was the beginning of my dialogue with Michel. I argued for a different definition of peer production, rather than as something that is inherently immaterial, I defined it as independent producers collectively sharing a commons of productive assets. That definition of peer production is much more compatible with anarchist-communist, anarchist-syndicalist roots, and also better describes the peer-to-peer technologies that inspired the term “peer production”.
So, to try to explain what “venture communism” is, which is my own project, predating the term “peer production”, but very relevant to it. I think we’re talking about the same thing, even if I was using different terms. As a technologist, I was also inspired by the functioning of peer networks and the organization of free software projects. These were also the inspiration for venture communism. I wanted to create something like a protocol for the formation and allocation of physical goods, the same way we have TCP/IP and so forth, as a way to allocate immaterial goods. The Internet gives us a very efficient platform on which we can share and distribute and collectively create immaterial wealth, and become independent producers based on this collective commons.
Venture communism seeks to tackle the issue of how we can do the same thing with material wealth. I drew on lots of sources in the creation of this model, not exclusively anarchist-communist sources. One was the Georgist idea of using rent, economic rent, as a fundamental mutualizing source of wealth. Mutualizing unearned income is essentially what that means in layman’s terms. The idea is that people earn income not only by producing things, but by owning the means of production, owning productive assets, and our society is unequal because the distribution of productive assets is unequal.
Even within the cooperative movement, which I’ve always admired and held up as an example, it’s clear that the distribution of productive assets is also unequal. The same with other kinds of production; for example, if you look at the social power of IT workers versus agricultural workers, it becomes very clear that the social power of a collective of IT workers is much stronger than the social power of a collective agricultural workers. There is inequality in human and capital available for these cooperatives. This protocol would seek to normalize that, but in a way that doesn’t require administration. The typical statist communist reaction to the cooperative movement is saying that cooperatives can exclude and exploit one another, and that solution is either creating giant cooperatives like Mondragon, or socialist states.
But then, as we’ve seen in history, there’s something that develops called an administrative class, which governs over the collective of cooperatives or the socialist state, and can become just as counterproductive and often exploitive as capitalist class. So, how do we create cooperation among cooperatives, and distribution of wealth among cooperatives, without creating this administrative class? This is why I borrowed from the work of Henry George and Silvio Gesell in created this idea of rent sharing.
The idea is that the cooperatives are still very much independent just as cooperatives are now. The producers are independent, but instead of owning their productive assets themselves, each member of the cooperative owns these together with each member of every other cooperative in the Federation, and the cooperatives rent the property from the commune collectively. This is not done administratively, this is simply done as a protocol. The idea is that if a cooperative wants an asset, like, an example is if one of the communes would like to have a tractor, then essentially the central commune is like a bond market. They float a bond, they say I want a tractor, I am willing to pay $200 a month for this tractor in rent, and other members of the cooperative can say, hey, yeah, that’s a good idea,we think that’s a really good allocation of these productive assets, so we are going to buy these bonds. The bond sale clears, the person gets the tractor, the money from the rent of the tractor goes back to clear the bonds, and after that, whatever further money is collected through the rent on this tractor – and I don’t only mean tractors, same would be applied to buildings, to land, to any other productive assets – all this rent that’s collected is then distributed equally among all of the workers.
So, the unearned income, the portion of income derived from ownership of productive assets is evenly distributed among all the cooperatives and all the stakeholders among those cooperatives, and that’s the basic protocol of venture communism.
Michel: Okay, Dmytri, just to make sure I understand it right, it’s like a basic income, right? In the sense that you have your wage, because you work, and then in addition you get this rent from all the productive forces held together by all the members of this economic unified cooperative production?
Dmytri: Exactly. Whatever productive assets you consume, you pay rent for, and that rent is divided equally among all members of the commune. Not the individual cooperatives, but the commune itself. This means that if you use your exact per capita share of property, no more no less than what you pay in rent and what you received in social dividend, will be equal. So if you are a regular person, then you are kind of moving evenly, right? But if you’re not working at that time, because you’re old, or otherwise unemployed, then obviously the the productive assets that you will be using will be much less than the mean and the median, so what you’ll receive as dividend will be much more than what you pay in rent, essentially providing a basic income. And conversely, if you’re a super motivated producer, and you’re greatly expanding your productive capacity, then what you pay for productive assets will be much higher than what you get in dividend, presumably, because you’re also earning income from the application of that property to production. So, venture communism doesn’t seek to control the product of the cooperatives. The product of the cooperatives is fully theirs to dispose of as they like. It doesn’t seek to limit, control, or even tell them how they should distribute it, or under what means; what they produce is entirely theirs, it’s only the collective management of the commons of productive assets.
Michel: Dmyitri, I think your theory has three constitutive elements, one is the venture communism, what are the two others? Can you briefly recall your idea of the peer production license, which I mentioned at the beginning?
Dmytri: Yes, first part is related to my critique of Benkler, and the peer production license comes, well, it predates it, but it enters this conversation between us through my critique of Lessig. The three constituent parts of venture communism were developed in speaking to a lot of people involved in cooperatives and economists. On paper this would seem to work, but the problem is that this assumes that we have capital to allocate in this way, and that is not the case for most of the world workers. So, how do we get to that stage? And that’s where venture communism becomes an umbrella, venture communism being only one constituent element, the other two being counter politics and insurrectionary finance. The idea of counter politics is that there is a long-running feud in the communist community and socialist community and, actually, the activist community generally: do we express our activism through the state, or do we try to achieve our goals by creating the alternative society outside…
Michel: …pre-figurative politics…
Dmytri: …pre-figurative politics, versus statist politics. And with the idea of counter politics, I’m trying to show that this is actually a false dilemma, because the idea of pre-figurative politics presupposes that we have the wealth in order to create these pre-figurative enterprises, these pre-figurative startups or co-ops or whatever. My materialist background tells me that when you sell your labor on the market, you have nothing more than your subsistence costs at the end of it, so where is this wealth meant to come from? I believe that the only reason that we have any extra wealth beyond subsistence is because of organized social political struggle; because we have organized in labor movements, in the co-op movement, and in other social forms. We have fought for this, so that we now have more than our subsistence. And this is the reason that we can’t even consider pre-figurative solutions. To create the space for prefiguring presupposes engagement with the state, and struggle within parliaments, and struggle within the public social forum.
What I propose in counter politics is that we don’t think of engaging in party politics, as in the sort of classic Leninist party idea, that we will take the state, that we will impose new social relationships from the top down, and we will go through an intermediary stage of socialism, and we will finally achieve communism. This is a very problematic conception, and I’m not very hopeful that that kind of solution would work. Instead, we should think that no, we must engage in the state in order to protect our ability to have alternative societies, in order to protect the benefits that we have now, in order to protect the public services and the public goods, and the public benefits. We have to acknowledge that there are certain social functions that the state provides that are socially necessary, and we cannot do without them. We can only get rid of the state in these areas once we have alternative, distributed, cooperative means to provide those same functions. Just because we can imagine that they can exist doesn’t make them exist. We can only eliminate the state from these areas once they actually exist, which means we actually have to build them. We have to create alternative ways to provision healthcare, childcare, education, to deal with human frailty and economic cycles, all these kinds of social functions the state provides that are socially necessary.
Michel: Okay, so what about insurrectionary finance, that’s your third…
Dmytri: There’s a strange corner of the activist community that’s called alternative economics, and this is almost held in the same disdain as conspiracy theory by most activist groups. Everybody thinks, oh, yes, alternative currencies and alternative kinds of things are kind of irrelevant to the social thing. What I mean by insurrectionary finance is that we have to acknowledge that it’s not only forming capital and distributing capital, it’s also important how intensively we use capital. We have to understand the role of money, the role of debt, the role of economic interactions, and how to model them in order to create a more intensive use of capital.
If you understand the capitalist economy, everybody knows that the amount of money in the economy is greatly expanded through economic things like loans, securities, and various economic means where capital, especially finance capital, is used more intensively than it otherwise would, sometimes dangerously so. I’m not proposing that the cooperative movement needs to engage in the kind of derivative speculative madness that led to the financial crisis, but at the same time we can’t… it can’t be earn a dollar, spend a dollar. We have to find ways to create liquidity, to deal with economic cycles, and so we have to look at alternative economics in order to do that. And sometimes even not-so-alternative economics, as we’ve talked about before.
Paradoxically, I’m rather inspired by Michael Milken and the robber barons corporate raiders of the 80s that are famous for making junk bonds. They were sort of the financial side of the industrialization of the West, and their mechanisms were to issue junk bonds, low rated bonds, use these funds to buy corporations that work undervalued, and then basically strip the assets – the land, the capital, just strip them down, close them, sell of the assets, repay the bonds, keep their huge profits, and rinse and repeat, as it were, over and over again.
And this to me is really interesting, because, on one hand, it’s horrible what they did, and the legacy of the damage that the robber barons corporate raiders had is pretty large. But on the other hand, it’s kind of inspiring because they did things the organized left hasn’t been able to do, which is takeover industrial means of production, right? So it seems to me that we should be inspired by that, and we should think, well, if they can take over these industrial facilities, just in order to shut them down and asset strip them, why can’t we take them over and mutualize them? It becomes even more ironic once you understand that the source of investment that Milken and his colleagues were working with were largely workers pension funds. It was actually the savings of workers – achieved through social struggle as we’ve talked about before. Unions got together and struggled against the bosses to allow workers to save, which was already struggle one, then they put these savings into pension funds – and then Milken and his followers sold their bonds to these pension funds and used this money to destroy the factories that the workers were working in.
Michel: I think it’s maybe time for John to make some comments on Dmytri’s ideas.
John: A couple of thoughts come to mind around the idea of venture communism – it’s great term by the way – and a new model for pooling, based on the capture of unearned income. It’s a very suggestive model, there are close models to this that are already being used by cooperatives to share machinery. For example, I know for example in Québec, there is a particular form of co-op that’s been developed that allows small or medium producers to pool their capital to purchase machinery and to use it jointly. It doesn’t have exactly the form that you’re talking about, which is this kind of bond issue, which is a very interesting idea, I’d love to see that applied. The other idea I liked was trying to minimize a management class, within these systems. I know this varies from co-op to co-op and federation to federation, but I do know that in these kinds of shared pool systems of both capital and equipment, that the organizations that are put in place for the management of these systems are, by comparison to other forms of control, much more lean and accountable because they are accountable to boards of directors that represent the interests of the members. But I take your point around that. So, very interesting idea.
The second point that comes to my mind is around this tension that you described within the left, and among activists. It’s a tension around their relationship to the idea of the market, and to capital for that matter. I’ve run into this repeatedly among social change activists who immediately recoil at the notion of thinking about markets and capital, as part of their change agenda.
I think what was most revelatory to me around the cooperative movement was that I used to think of the same way. The most important lesson I took from my contact with the cooperative movement was a complete rethinking of economics. I had thought previously, like so many, that economics is basically a bought discipline, and that it serves the interests of existing elites. I really had a kind of reaction against that. When I saw and understood that cooperatives were another form of economics, a popular form of economics, it completely shifted my perception around what social change entails, with respect to the market. One of the things I think we really have to do is to recapture the initiative around vocabulary, and vision, with respect to economics.
John: And a key part of that is reimagining and reinterpreting, for a popular and common good, the notion of market and capital. And that’s what cooperatives, among other kinds of systems, do. They reclaim the market. I think that’s a fundamental task, in terms of educating and advocating for a vision of social change that isn’t just about politics, and isn’t just about protest, it has to be around how do we reimagine and reclaim economics, and how do we develop forms where markets actually belong to communities and people, not just to corporations. Traditionally markets were not just a property of corporations and companies, and capital wasn’t just an accumulated wealth for the rich. Capital can be commons capital, it can be a commons market, and we need to come up with forms and models that actually realize that in practice, and that’s what the peer-to-peer movement is, that’s what the cooperative movement is, and we need to find ways of conjoining those two.
Dmytri: I agree.
Michel: I agree too, and I think this is a really nice way to start our conclusion, just to make another reference to the project here in Ecuador. I think in many countries now, there are ministries of the social economy, of the solidarity economy, but they’re always seen as kind of marginal add-ons. I think what we’re potentially talking about here is to make the social economy hyper-productive, hyper-competitive, hyper-cooperative. The paradox is that capital already knows this. Capital is investing in these peer production projects, and cooperatives are not yet massively turning that way, so this is what we have to achieve. Part of the proposal of the FLOK society project in Ecuador will be to get that strategic reorganization to make the social economy strategic, not just as an add-on to an existing neoliberal format. I think we’ve pretty much finished, but I just wanted to mention that the end of our discussion in the bar, I proposed that the P2P foundation, which has a co-op, would also try to create a seed form for what Dmytri proposes. I hope that they weren’t drunk when they were saying that, but John and Dmitri actually said they would cooperate (laughter). So, KMO, maybe you have a last question? I think that we’re nearly at the end of the allotted time.
KMO: Well, we are at the end of the allotted time, I have been taking notes and I have a lot of questions (laughter). What I’ll have to do is get each of you on Skype individually in the coming weeks, and put my questions to you one-on-one, because I think that there’s at least three episodes worth of questions that I have here.
Michel: Yes, it’s very dense and I apologize to your listeners, l hope it wasn’t sleep inducing! but this is strategic, we’re talking about the DNA of the system, and I think that’s why it’s so important that we had this occasion to actually talk together and compare our perspectives.
KMO: Well, I’m very happy to of been a party to it, and I’m looking forward to re-listening, because I know I’ll be taking a lot more information from the recording that you’ve made as as I listen to it and edit it for a one-hour podcast. Dmytri Kleiner, Michel Bauwens, and John Restakis, thank you very much for all the work you’re doing, and for participating on the C-Realm Podcast.