cooperatives

Mutualized Solutions for the Precariat

Large companies have long sought to boost profits by converting their employees into “independent contractors,” allowing them to avoid paying benefits.  The rise of the “gig economy” – exemplified by digital platforms such as Uber and Airbnb – has only accelerated this trend.  Business leaders like to celebrate the free agent, free market economy as liberating -- the apex of American individualism and entrepreneurialism.  But the self-employed are more likely to experience a big loss of income, security and collegiality.  There is a reason that this cohort is called “the precariat.”

A new report by Co-operatives UK called “Not Alone:  Trade Union and Co-operative Solutions for Self-Employed Workers” offers a thoughtful, rigorous overview of this neglected sector of the economy.  Although it focuses on the UK, its findings easily apply internationally, particularly for co-operative and union-based solutions. 

The author of the report, Pat Conaty, notes that “self-employment is at a record level” in the UK – some 15% of the workforce – and rising.  While some self-employed workers choose this status, a huge number are forced into through layoffs and job restructuring, with all the downward mobility and loss of security implied by them. 

Few politicians or economists are honestly addressing the implications.  They assume that technological innovation will simply create a new wave of jobs to replace the ones being eliminated, same as it ever was.

The sad truth is that investors and companies benefit greatly from degrading full-time jobs into piecemeal, task-based projects tackled by a growing pool of precarious workers.  This situation is only going to become more desperate as artificial intelligence, automation, driverless vehicles and platform economics offshore and de-skill conventional jobs if they don't permanently destroy them.  

One of the more complicated, mostly unresolved issues facing most commons is how to assure the independence of commons when the dominant systems of finance, banking and money are so hostile to commoning. How can commoners meet their needs without replicating (perhaps in only modestly less harmful ways) the structural problems of the dominant money system?

Fortunately, there are a number of fascinating, creative initiatives around the world that can help illuminate answers to this question – from co-operative finance and crowdequity schemes to alternative currencies and the blockchain ledger used in Bitcoin, to reclaiming public control over money-creation to enable “quantitative easing for people” (and not just banks). 

To help start a new conversation on these issues, the Commons Strategies Group, working in cooperation with the Heinrich Böll Foundation, co-organized a Deep Dive strategy workshop in Berlin, Germany, last September.  We brought together 24 activists and experts on such topics as public money, complementary currencies, community development finance institutions, public banks, social and ethical lending, commons-based virtual banking, and new organizational forms to enable “co-operative accumulation” (the ability of collectives to secure equity ownership and control over assets that matter to them).

I’m happy to report that a report synthesizing the key themes and cross-currents of dialogue at that workshop is now available.  The report is called “Democratic Money and Capital for the Commons:  Strategies for Transforming Neoliberal Finance Through Commons-Based Alternatives,” (pdf file) by David Bollier and Pat Conaty.

You could consider the 54-page report an opening gambit for commoners to discuss how money, banking and finance could better serve their interests as commoners.  There are no quick and easy answers if only because so much of the existing money system is oriented towards servicing the conventional capitalist economy.  Even basic financial terms often have an embedded logic that skews toward promoting relentless economic growth, the extractivist economy and its pathologies, and the notion that money itself IS wealth. 

That said, commoners have many important reasons for engaging with this topic.  As we put it in the Introduction to the report, “The logic of neoliberal capitalism is responsible for at least three interrelated, systemic problems that urgently need to be addressed – the destruction of ecosystems, market enclosures of commons, and assaults on equality, social justice and the capacity of society to provide social care to its citizens. None of these problems is likely to be overcome unless we can find ways to develop innovative co-operative finance and money systems that can address all three problems in integrated ways.”

Every time Uber, the Web-based taxi intermediary, enters a new city, it provokes controversy about its race-to-the-bottom business practices and bullying of regulators and politicians.  The problem with Uber and other network-based intermediaries such as Lyft, Task Rabbit, Mechanical Turk and others, is that they are trying to introduce brave new market structures as a fait accompli. They have only secondary interest in acceptable pay rates, labor standards, consumer protections, civic and environmental impacts or democratic debate itself. 

Rather than cede these choices to self-selected venture capitalists and profit-focused entrepreneurs, some European cities and regional governments came up with a brilliant idea:  devise an upfront, before-the-fact policy framework for dealing with the disruptions of the “sharing economy.”

If we can agree in advance about what constitutes a socially respectful marketplace – and what constitutes a predatory free-riding on the commonweal – we’ll all be a lot better off.  Consumers, workers and a community will have certain basic protections. Investors and executives won’t be able to complain about “unlevel playing fields” or unfair regulation. And public debate won’t be a money-fueled free-for-all, but a more thoughtful, rational deliberation.

Now, if only the European Union will listen to the Committee of the Regions (CoR)!  The CoR is an official assembly of regional presidents, mayors and elected representatives from 28 EU countries. It routinely expresses its views on all sorts of major policy issues that may have local or regional impacts. In December, the CoR submitted a formal statement about the “sharing economy” to the EU in an opinion written by rapporteur Benedetta Brighenti, the deputy mayor of the municipality of Castelnuovo Rangone, in the province of Modena, Italy. 

Today's post is the third in a four-part series derived from my strategy memo, "Reinventing Law for the Commons."  This excerpt continues with Part II, "Legal Innovations in Beating the Bounds," with "clusters" #5 through #9. The collection of entries here are now posted on a Commons for the Law wiki hosted by the Commons Transition website.

5.  Co-operative Law

There are a number of legal and organizational innovations transforming co-operatives these days, making them moreoriented to commoning and the common good than just marketplace success. However, these innovations are geographically dispersed and not necessarily widely known, even within the co-operative movement.  One of the most notable new organizational forms is the multistakeholder co-operative (or “social and solidarity cooperative”), which has been rapidly proliferating in recent years.  It got its start in Italy in 1963 when families in Italy joined forces with paid care workers to develop co-operatives to provide social care, healthcare and educational services. This new paradigm collectivizes and centralizes basic overhead services (administration, personnel, accounting, etc.) and in this way empowers smaller social economy ventures (similar to “omni-commons,” see section #8 below). 

In a sense, multistakeholder co-ops regularize governance for co-stewardship of commons spaces and moves away from rigid bureaucratic methods that increasingly don’t work.[1]  Multistakeholder co-ops now employ more than 360,000 in paid jobs, including the disabled, the formerly imprisoned and marginalized people, and more than 40,000 volunteers.  Social co-operatives have spread to all regions of Italy and today number more than 14,000, making it a significant sector of the Italian economy that is neither market- nor state-based.  Today there are multi-stakeholder co-operative movements in Quebec in Canada and in a wide number of countries in Europe including France, Spain, Poland, Hungary, Finland and Greece[2].

Below, a continuation of yesterday's post from the strategy memo, "Reinventing Law for the Commons," Part II of the four-part piece.

II.  Legal Innovations in Beating the Bounds:  Nine Promising Fields of Action 

Part II surveys the enormous amount of legal innovation going on in various commons-related fields of action.  The point of this section is to identify specific initiatives that are trying to transform the legal paradigm or carve out new “protected zones” of enforceable rights within existing legal frameworks.  I have identified nine major “clusters” of interesting experimentation and ferment:

1.  Indigenous Commons   

2.  Subsistence Commons in the Global South       

3.  Digital Commons       

4.  Stakeholder Trusts

5.  Co-operative Law 

6.  Urban Commons  

7.  Localism            

8.  New Organizational Forms     

9.  Re-imagining State Policy to Empower Commons   

Today's post focuses on the first four "clusters"; tomorrow's deals with #5 through #9.  And the final day will deal with Part III:  The Strategic Value of Developing Law for the Commons, and Part IV:  Next Steps.

The list of clusters and examples in Part II is not comprehensive.  It is merely a first attempt to assemble the fragments of commons-based legal innovation into a new mosaic that makes key, unifying themes more visible.  (I invite readers of this memo to inform me of any worthy additions by contacting me at david/at/bollier.org.)  Some examples may belong in two or more clusters, which I’ve tried to indicate with cross-references.  In Part III, I will reflect on the political and philosophical implications of the examples of Part II, followed by a discussion in Part IV of practical steps that might be taken to consolidate and extend Law for the Commons as a coherent body of legal activism.

The Catalan Integral Cooperative (CIC, pronounced “seek”) is surely one of the more audacious commons-based innovations to have emerged in the past five years.  It is notable for providing a legal and financial superstructure that is helping to support a wide variety of smaller self-organized commons.  Some of us are calling this proto-form an “omni-commons,” inspired by the example of the Omni Commons in Oakland.

CIC is smart, resourceful, socially committed and politically sophisticated.  It has bravely criticized the Spanish government’s behavior in the aftermath of the 2008 financial crisis, which has included massive bank bailouts, foreclosures on millions of homes, draconian cutbacks in social services, a lack of transparency in policymaking.  CIC regards all of this as evidence that the state is no longer willing to honor its social contract with citizens.  Accordingly, it has called for civil disobedience to unjust laws and is doing everything it can to establish its own social order with a more humane logic and ethic.

Journalist Nathan Schneider provides a fascinating, well-reported profile of CIC in the April issue of Vice magazine. The piece focuses heavily on the role of the visionary activist Enric Duran, who in 2008 borrowed $500,000 from banks, and then he gave the money away to various activist projects. Despite being on the run from Spanish prosecutors, Duran went on to launch CIC in early 2010 with others. 

His avowed goal is to build a new economy from the ground up.  CIC is a fascinating model because it provides a legal and financial framework for supporting a diverse network of independent workers who trade with and support each other.  This is allowing participants to develop some massive social and economic synergies among CIC's many enterprises, which include a restaurant, hostel, wellness center, Bitcoin ATM, library, among hundreds of others.

As Schneider writes:

At last count, the CIC consisted of 674 different projects spread across Catalonia, with 954 people working on them. The CIC provides these projects a legal umbrella, as far as taxes and incorporation are concerned, and their members trade with one another using their own social currency, called ecos. They share health workers, legal experts, software developers, scientists, and babysitters. They finance one another with the CIC's $438,000 annual budget, a crowdfunding platform, and an interest-free investment bank called Casx. (In Catalan, x makes an sh sound.) To be part of the CIC, projects need to be managed by consensus and to follow certain basic principles like transparency and sustainability. Once the assembly admits a new project, its income runs through the CIC accounting office, where a portion goes toward funding the shared infrastructure. Any participant can benefit from the services and help decide how the common pool is used.

Is it possible to imagine a new sort of synthesis or synergy between the emerging peer production and commons movement on the one hand, and growing, innovative elements of the co-operative and solidarity economy movements on the other? 

That was the animating question behind a two-day workshop, “Toward an Open Co-operativism,” held in August 2014 and now chronicled in a new report by UK co-operative expert Pat Conaty and me.  (Pat is a Fellow of the New Economics Foundation and a Research Associate of Co-operatives UK, and attended the workshop.) 

The workshop was convened because the commons movement and peer production share a great deal with co-operatives....but they also differ in profound ways.  Both share a deep commitment to social cooperation as a constructive social and economic force.  Yet both draw upon very different histories, cultures, identities and aspirations in formulating their visions of the future.  There is great promise in the two movements growing more closely together, but also significant barriers to that occurring.

The workshop explored this topic, as captured by the subtitle of the report:  “A New Social Economy Based on Open Platforms, Co-operative Models and the Commons,” hosted by the Commons Strategies Group in Berlin, Germany, on August 27 and 28, 2014. The workshop was supported by the Heinrich Böll Foundation, with assistance with the Charles Léopold Mayer Foundation of France. 

Below, the Introduction to the report followed by the Contents page. You can download a pdf of the full report (28 pages) here. The entire report is licensed under a Creative Commons Attribution-ShareAlike (BY-SA) 3.0 license, so feel free to re-post it.

New Start magazine, a British magazine associated with the Manchester-based Centre for Local Economic Strategies, has just come out with a terrific issue (#525, October 2014) about co-operatives and commons.  The essays focus on how “more democratic forms of ownership – of land, housing, workplaces and the public realm – can revive our places.” 

While most of the essays deal with British co-ops and commons, the lessons and strategies mentioned have a relevance to many other places. Consider land ownership, a topic that is rarely a part of progressive political agendas.  Steve Bendle, director of a group called Community Land and Finance, offers a clear-eyed assessment of how government is obsessed with enhancing the value of land for landowners and developers – while largely ignoring how land could be used to serve citizens, taxpayers and the wider community. 

Unneeded land and government buildings, for example, are generally put up for sale on the market rather than used to serve the needs of a community for housing, work spaces or civic infrastructure.  The assumption is that privatized, market-driven uses of the assets will yield the greatest “value” (narrowly defined as return on investment to private investors). 

When government (i.e., taxpayers) finances new roads, subways or rail systems, the market value at key locations and buildings invariably rises.  But government rarely does much to capture this value for the public. 

Bendle concludes:  “So developers and landowners make profits, while the public sector struggles to secure a contribution to infrastructure costs or to deliver affordable homes despite successive attempts to change the planning system.”

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.

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 blogfollows 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.

Syndicate content