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Are Coops Outdated in a Network Age?

photo of Michel Bauwens

Michel Bauwens
25th November 2012


Excerpted from a Facebook discussion by Tiberius Brastaviceanu:

“I think the coop is as outdated as the corporation. It adds more democratic processes into our economy, and democratizing the economy will definitely have an impact on our governance systems, making our representative “democracy” more democratic. But coops aren’t well- equipped to extract value from the long tail, which is the core of the new p2p paradigm. They are boxes with well-defined boundaries, NOT networks.

I have the impression that once they bite on the value network model these coops will dissolve further into smaller grain networks.

Here’s a question to digest: The coop and corporation have been competing for years now, and the corporation came on top. What’s in there to reverse the situation???

In my mind, p2p implies non-intermediated one-to-one exchanges, but also many-to-many exchanges. Moreover, p2p is a pattern in a fractal structure: agents can be individuals or organizations, and we see this pattern at different levels of organization. The “value network” model also applies at different levels of organization.

I think the important question here is: What will be the level of decentralization? To what scale of this fractal structure (our global society) the p2p pattern and the value network pattern will penetrate?

I believe in economy we already see the p2p and the value network pattern at the lowest level, at the level of the individual. In other words, individuals can get together in a network fashion to produce something valuable and to deliver it. If we build a platform that reduces transaction costs, allows non-intermediated one-to-one as well as many-to-many transactions, solves the value accounting problem, etc. these small grain (down to the individual) production clusters (commons-based peer production) will be able to flourish. There will still be a need for what I call boxes (corporations, co-ops and other such forms designed for scarcity in human resources and a luck of good information systems), but in the realm of knowledge production or knowledge intensive activities networks will take over. This is my prediction…

We still have feudal systems today… old forms are here for long… but value networks at the individual level will become increasingly potent.

So we can have a value network by putting co-ops together, and we can have a value network by putting individuals together. Once both co-exist I predict a tendency of individuals to come out of power structures, if they can. In other words, individuals will prefer to work as individuals/affiliates within a network rather than as employees or co-op members, within a network. That is if the platform that supports value networks offers an acceptable level of security, which we believe will be the case. The economic nomad is on the rise in my opinion.

This is why I don’t combat co-ops. I just think they are outdated structures. They are temporarily on the rise because people are looking for alternatives and the reflex is to reach to something familiar. It’s all good, but I don’t see them adapted for the new information age and I want to avoid a waste of time and resources going too far on the wrong path.

Value networks are very corrosive environments for power structures. Value networks are the poisoned fruit we offer to the actual system.

We are demonstrating that they work at the individual level (putting a number of individuals on a platform to co-create value). We are building our infrastructure to scale our success to networks of thousands of individuals. We don’t know who that’s going to work, but my experience and other similar systems around tell me that we have a good chance to succeed.

SENSORICA accepts as members not only individuals, but also organizations. Individuals and organizations are seen by the value accounting system as being agents, affiliates, with the same rights and responsibilities. Two years ago I predicted that power structures members of SENSORICA will feel a lot of pressure to dissolve within the network, i.e. to decompose into individuals. A few weeks ago my prediction became a reality. Tactus, initially a small company acting like one entity within the network, with its own goals, disintegrated into individual affiliates and became an empty shell, an interface with the system. I am observing other organizations that interface with us and I see signs of the same phenomena.

Again, if the platform provides an acceptable level of security, if individuals are able to estimate their risks, value networks will drain their corporate and co-op affiliates of their individuals talent. I am not saying all that to be mean… I am just describing the properties and effects of what we’ve created. My ultimate goal is to make the world a better place.”

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One Response to “Are Coops Outdated in a Network Age?”

  1. David de Ugarte Says:

    Isnt it unother time the cultural confussion between consumption (anglosaxon world) and workers coops (continental Europe)? I read and I almost agree the ideas if they are about consumption coops but, for organizing collective work coops are still a good technology.

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