cooperatives

In our legal system -- designed to protect private property, individual rights, and market exchange – it can actually be very difficult to share things legally. Attorney Janelle Orsi found this out the hard way as she worked with co-housing groups, worker cooperatives, and community gardens. “Our clients kept running up against legal barriers that make no sense: employment laws for co-ops in which people are both employer and employee. Landlord-tenant law for cohousing projects in which people are both landlords and tenants.”

Such frustrations led Orsi to co-found (with Jenny Kassan) the Sustainable Economies Law Center (SELC) in Oakland, California, in late 2009. It has since become a singlular team of venturesome lawyers attempting creative hacks on antiquated laws and regulations.Their clients are not corporations or other deep-pocket moguls, but grassroots groups, cooperatives, and social justice organizations, especially in the Bay Area.

The story of the Sustainable Economies Law Center’s amazing work is the subject of my latest Frontiers of Commoning podcast, Episode #8. Janelle explains some of the innovative legal strategies that the Law Center uses to try to help cooperatives, commons, low-income communities, and Native Americans, among others. (Full disclosure: I am on SELC’s advisory board.)

“The law treats people as atomized, bounded individuals in conflict with each other, in an attempt to keep people separate,” said Orsi. Much of the work at the Law Center is therefore about coming up with ingenious hacks on the law so that people can solve their problems together. The organization describes its theory of change this way: 

“Neither our communities nor our ecosystems are well served by an economic system that incentivizes perpetual growth, wealth concentration, and the exploitation of land and people. Communities everywhere are responding to these converging economic and ecological crises with a grassroots transformation of our economy that is rapidly re-localizing production, reducing resource consumption, and rebuilding the relationships that make our communities thrive."

How can cooperatives serve as vehicles for social change, especially in online spaces?  What practical interventions could check the anti-social behaviors of Big Tech?  These are two questions that I explored recently with Nathan Schneider, professor of media studies at the University of Colorado Boulder, in Episode #8 of my podcast, “Frontiers of Commoning.”

Nathan is a long-time journalist and scholar focused on social-change movements of resistance, nonviolence, and system-change. Much of his work has focused on the new opportunities that cooperatives and digital technologies can provide in today’s world. He has been especially active in promoting platform cooperatives as a vehicle for moving beyond predatory business models like Uber, Airbnb, and TaskRabbit.

For Schneider, the history of cooperatives is a source of great inspiration and practical instruction.  “Cooperatives are nothing new,” he told me, citing Gandhi’s embrace of coops as a strategic tool to emancipate Indians from the British. “But it is a form of doing business that has shaped our world that doesn’t get enough credit.” For example, people often don’t appreciate that coops were a big element of the civil rights movement, he said.

Martin Luther King Jr. supported African-Americans in starting credit unions, in part because cooperative banking enabled them to become more independent from oppressive local circumstances.  “I interviewed a civil rights elder in Mississippi,” said Nathan, and asked him if coops were around in the 1960s. And he said, ‘Who do you think was getting people registered to vote?’”

Sharecroppers always risked getting evicted from the land if they dared to assert their civil rights or become politically active. But members of coops are secure enough to take risks and join movements, he said. “This is a geography of our world that we don’t see.”

African Americans have long been victimized by the theft of their land, labor, and the ability to buy land as they wish. Following the Civil War, few former slaves actually received the 40 acres and a mule promised them, and in later decades, all sorts of discriminatory federal policies and bank lending practices made it harder for Blacks and other non-Whites to acquire land. This only served to make it harder for them to earn a decent income, amass household wealth, and improve their lot.

Following the Black Lives Matters protests there have been a spate of important proposals for addressing these forms of structural racism and inequality. One idea gaining momentum is to move more land into community land trusts (CLTs), making it easier for African Americans to gain access to land for farming, housing, and other purposes while neutralizing capitalism’s tendency to generate greater structural inequality.

Acquiring more land for CLTs dedicated to African-American cultural use would be a great way to address a colossal historic wrong.  It would serve as a practical and effective reparation that would benefit many African Americans and communities, and could at the same time reclaim land for ecological and socially valuable purposes.

Theft of Black land has been remarkably common over the decades, as a number of journalistic accounts have documented in recent years. In 2019, for example, Pro Publica and The New Yorker described how white developers and lawyers used legal trickery and corrupt judges to take over ancestral land owned by two Black brothers in Carteret County, North Carolina. The practices have been widely used in the South as a way to steal land from African Americans.

Between outright bans on black ownership of land, discriminatory lending policies, racially motivated zoning, and legal ploys to steal land, African Americans have often had trouble acquiring land and thereby the wealth that could bring them into the middle class. It is estimated that between 1910 and 1997, African Americans lost an estimated 90 percent of their farmland.

In the nearly 50 years since the Park Slope Food Co-op Brooklyn opened, it has become both legendary and taken-for-granted. People seem to forget that its success was based on heroic struggle and lots of difficult internal commoning. Many outsiders see a gilded precinct of New York City filled with affluent professionals, not realizing that the Co-op arose from within a funky neighborhood of ordinary people who wanted high-quality, affordable, responsibly produced groceries. And indeed, most of its members are still ordinary, middle-class New Yorkers.

A lengthy piece in The New Yorker magazine (November 25 issue) captures the complicated and colorful history of the Co-op magnificently. “The Grocery Store Where Produce Meets Politics,” by Alexandra Schwartz, dives deeply into the inner life of the Co-op and the people who both venerate it and condescend to it. The Park Slope Food Co-op is a landmark achievement of what can be achieved through commoning in a co-operative organizational structure. 

The Co-op's most salient achievement may be its sheer scale. It has more than 17,000 members and annual sales revenues of $58.3 million. Yet it is still run as a participatory, democratically managed operation whose members actively care about eco-friendly agriculture and socially minded practices.

Unlike many co-ops that regard themselves as quasi-corporations competing in the market, perhaps with a nod to social concern, the Park Slope Food Co-op remains unabashedly committed to functioning as a commons. It is a self-help collective, as one of its leaders put it, not a do-gooder project.

In her early encounters with the Co-op, journalist Alexandra Schwartz found it “to be claustrophobically crowded, illogically organized, and almost absurdly inconvenient. In other words, it was love at first sight. Suddenly, on my editorial assistant’s salary, I was eating like an editor-in-chief.” The Co-op is not a sleek, modernist Whole Foods store with precious upscale touches. It’s a place where you can get fantastically fresh local produce, inexpensive cheese, and high-quality expeller-pressed cooking oils. Prices are generally 15% to 50% less than those of a conventional grocery store. 

Can diverse social movements come together and find new synergies for building a new type of economy?  Last week there were some significant conversations along those lines at Goldsmiths College in London, at the Open Co-op conference. The two-day event brought together leading voices from the co-operative, open source, and collaborative economy movements as well as organized labor. The gathering featured a lot of experts on co-operative development, law, software platforms, economics and community activism.

The basic point of the conference was to:  

“imagine a transparent, democratic and decentralised economy which works for everyone. A society in which anyone can become a co-owner of the organisations on which they, their family & their community depend. A world where everyone can participate in all the decisions that affect them.

“This is not a utopian ideal, it is the natural outcome of a networked society made up of platform cooperatives; online organisations owned and managed by their members. By providing a viable alternative to the standard internet business model based on monopoly and extraction, platform cooperatives provide a template for a new type of organisation – forming the building blocks for a new economy.”

The idea of “platform co-operatives” – launched at a seminal New York City conference in November 2015 co-organized by Trebor Scholz and Nathan Schneider – has quickly found a following internationally. People have begun to realize how Uber, Airbnb, Taskrabbit and countless other network platforms are distressingly predatory, using venture capital money and algorithms to override health, safety and labor standards and municipal governance itself.

The London event showed the breadth and depth of interest in this topic – and in the vision of creating a new type of global economy.  There were folks like Felix Weth, founder of Fairmondo, a German online marketplace and web-based co-op owned by its users; Brianna Werttlaufer, cofounder and CEO of Stocksy United, an artist-owned, multistakeholder cooperative in Victoria, British Colombia; and co-operative finance and currency expert Pat Conaty.

There was a lot of talk about building new infrastructures that could mutualize the benefits from local businesses while connecting to a larger global network of co-ops sharing the same values.  Among the tools mentioned for achieving this goal: Mondragon-style co-ops, government procurement policies to favor local co-ops, shifting deposits to local credit unions, and crowdfunding citizen-led community development projects.

A very meaty issue of the British magazine STIR looks at a wide variety of projects based on Solidarity Economics.  Produced in collaboration with the Institute for Solidarity Economics at Oxford, England, the Winter 2017 issue explores everything from municipal energy in London to cooperatively owned digital platforms, and from childcare coops to the robust solidarity economies being built in Catalan and Rojava.  What’s striking about many of the articles is the fresh experimentation in new cooperative forms now underway.

Consider the Dutch organization BroodFondsMakers, based in Utrecht, an insurance-like system for self-employed individuals.  When a public insurance program was abolished by the government in 2004, a small group of self-employed individuals got together to create their own insurance pool.  More than a commercial scheme, members of the groups meet a few times a year, and even have outings and parties, in order to develop a certain intimacy and social cohesion.

When someone in a group gets sick for more than a month, they receive donations from the group, which usually have between 20 and 50 members. The mutual support is more than a cash payment, it is a form of emotional and social support as well. BroodFonds now has more than 200 groups and about 10,000 members participating in its system.

Another STIR article describes a new prototype for childcare in England that aims to overcome the well-known problems of high cost, low quality and poor availability of childcare.  The new cooperative model, Kidoop, is meant to be co-produced by parents and playworkers, and not just a market transaction. The model, still being implemented, aims to provide greater flexibility, better quality care and working conditions, lower costs, and a system that parents actually want.

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].