democratic ownership – P2P Foundation https://blog.p2pfoundation.net Researching, documenting and promoting peer to peer practices Mon, 17 May 2021 15:54:39 +0000 en-US hourly 1 https://wordpress.org/?v=5.5.15 62076519 The commons https://blog.p2pfoundation.net/the-commons/2019/06/19 https://blog.p2pfoundation.net/the-commons/2019/06/19#respond Wed, 19 Jun 2019 08:57:37 +0000 https://blog.p2pfoundation.net/?p=75238 The commons are collective resources managed by self-organized social systems under mutually acceptable terms. Written by Dana Brown, Director, The Next System Project. Article reposted from The Next System Project They are our collective heritage as a species—both those resources which we inherit from previous generations and those which we create—managed in such a way... Continue reading

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The commons are collective resources managed by self-organized social systems under mutually acceptable terms.

Written by Dana Brown, Director, The Next System Project. Article reposted from The Next System Project

They are our collective heritage as a species—both those resources which we inherit from previous generations and those which we create—managed in such a way as to preserve shared values and community identity. The commons are the collective resources themselves, and the practice of collective economic production and social cooperation used to steward those resources—as well as the values of equity and fairness that underpin them—is often referred to as commoning. Many resources can be managed as commons (though often there are attempts to privatize or “enclose” many of those same resources). These can include knowledge, urban space, land, blood banks, seed banks, the internet, open source software and much more.

Potential Impact

The commons are pervasive and as such, often go unnoticed. However, their thriving existence alongside forms of private and public ownership provides a framework for understanding and creating social value beyond the confines of conventional economics.

The rich traditions and successes of commoning provide models for how to push back against privatization and enclosure, ensuring common resources are protected for future generations. Meanwhile, political economist Elinor Ostrom’s Nobel Prize-winning work has disproved the enduring “tragedy of the commons” hypothesis that collectively managed natural resources would necessarily be overexploited and destroyed over the long term.

Taxing the private use of common resources, combined with
redistribution or other efforts to formalize “commons trusts” to ensure their sustainable stewardship, could help stem the tide of privatization and extraction. The tax proceeds could be used as a form of reparation to communities that have traditionally borne the brunt of extraction of their common resources, and to restore those resources when depleted.

Transformative Characteristics

Commoning is a generative and “value-making” process that can decommodify land and other resources, and demonstrate that communities can manage them effectively without private control or state governance. It asserts a different “universe of value” and worldview from capitalism and unfettered consumerism, and helps communities break free from the scarcity mindset of capital. “The commons does not compete on p rice or quality, but on cooperation,” says commons activist and author David Bollier. It “‘out-cooperates’ the market … by itself eliciting personal commitment and creativity and encouraging collective responsibility and sustainable practices.”

The commons, and related peer-to-peer production models, offer concrete, replicable, and dynamic frameworks for sustainably managing existing resources and creating new ones. They also offer a model for deciding what not to produce in order to most effectively protect our global common resources.

Examples

WIKIPEDIA

Wikipedia is a form of online knowledge commons, “a multilingual, web-based, free-content encyclopedia project supported by the Wikimedia Foundation and based on a model of openly editable content.” It contains more than 5 million encyclopedia entries (a shared resource), created and edited by its authors and editors (a community) with a set of community-determined content and editing guidelines (rules). Wikipedia displaced once-expensive bound encyclopedias to become one of the world’s largest reference websites, attracting hundreds of millions of unique users per month and engaging over 140,000 active users—a group that anyone with an internet connection can join—in creating and editing content in almost 300 languages.

EL PARQUE DE LA PAPA

Peru’s “potato park” is a community-led conservation project that preserves traditional customs and indigenous rights to the “living library” of genetic information contained in the over 900 varieties of potato found in the Inca Valley region. The native Quechua peoples bred and cultivated these potato varieties for centuries, but biotech and agricultural corporations moved to appropriate the genetic information in the seeds and take commercial control without the consent of the Quechua people. They then forced the Quechua to pay for the seeds their ancestors had worked so hard to breed and protect. Indigenous representatives organized and successfully negotiated the repatriation of the potato varieties and the rights to conserve them in a 32,000-acre potato park. More than 8,000 community members now collectively manage the park  to “promote the cultivation, use and maintenance of diversity of traditional agricultural resources” and to ensure their traditional agricultural resources do not become subject to private intellectual property rights.

Challenges

Most people are not aware of the pervasiveness and enduring nature of the commons and don’t understand commoning as a viable alternative to consumption-driven and competitive economics. The increasing enclosure and privatization of the commons is erasing our collective memory of many enduring commoning practices. For example, control of the majority of the global seed market (a resource once managed as a commons in many communities) is now concentrated in a handful of multinational corporations. Furthermore, scarcity of some common resources may intensify competition for control in the coming years, while others lack adequate infrastructure support and are therefore vulnerable to privatization.  

More Resources

• The Commons Transition Primer:  https://primer.commonstransition.org

• News, analysis and resources on the commons: www.bollier.org

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Right To Own: A Policy Framework to Catalyze Worker Ownership Transitions https://blog.p2pfoundation.net/right-to-own-a-policy-framework-to-catalyze-worker-ownership-transitions/2019/05/13 https://blog.p2pfoundation.net/right-to-own-a-policy-framework-to-catalyze-worker-ownership-transitions/2019/05/13#respond Mon, 13 May 2019 08:00:00 +0000 https://blog.p2pfoundation.net/?p=75095 Peter Gowan Executive Summary Age-old questions of ownership, control, and distribution in our economy remain as important as ever. In fostering the creation of communities and workplaces driven by values of solidarity, cooperation, and justice, workplace democracy and worker ownership are crucial, powerful tools, and they can and should play an important role in the... Continue reading

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Peter Gowan

Executive Summary

Age-old questions of ownership, control, and distribution in our economy remain as important as ever. In fostering the creation of communities and workplaces driven by values of solidarity, cooperation, and justice, workplace democracy and worker ownership are crucial, powerful tools, and they can and should play an important role in the next economic system.

There is already a long-standing policy agenda for worker ownership that has become a powerful and effective consensus in many countries. This agenda is behind the Employee Share Ownership Plan in the 1974 Employee Retirement Income Security Act, which made available additional tax privileges throughout the next decade and allowed Ronald Reagan to join John Lewis and Karl Marx on the list of those who made public statements in favor of worker ownership.1 It is also the agenda behind both the recent tax incentives for employee ownership trusts passed in the United Kingdom,2 and United States Sen. Kirsten Gillibrand’s recently passed 2018 legislation extending Small Business Administration assistance for worker cooperatives and ESOPs.3

These have produced real improvements for countless workers, but they can only take us so far. We need a policy agenda for worker ownership compatible with the systemic change we know we need on a global scale. If we want to transition to an economy that does not drive catastrophic climate change; dispossession and violence against people of color and the developing world; and gross inequalities of power, income, and wealth, then we need to develop a vision of worker ownership that can contribute to that transition, rather than one that aligns the interests of worker-owners with the shareholders of extractive private corporations that are the problem in our society.4

The initial section of this paper is a review of relevant policy models, including Italy’s decades-old Marcora framework, Washington, D.C.’s Tenant Opportunity to Purchase Act, and the legislative history of existing worker ownership models in the United Kingdom and United States. These will lead us on to a discussion about the principles that should underlie a progressive policy agenda for worker ownership.

The second section of this paper—the policy proposal itself—describes a set of institutions and laws that could enable a substantial share of the economy to transition to democratic worker ownership with “sheltering institutions” that provide a countervailing force against the rigid demands of the market. We aim to offer a path forward for worker ownership for those of us who believe that system change is necessary.

We provide a generalized technical model of a pluralistic “institutional ecosystem” to surround worker-owned businesses; a legal framework that provides an effective right of first refusal to workers to purchase sites and companies that are being closed or sold; and a discussion of the limits of our proposal and an outline of an interlocking mechanism that could fill the most significant of these gaps—especially capital-intensive, publicly traded, and large employers—with an “inclusive ownership fund” that would gradually increase democratic ownership over these key institutions in our economy.

The ultimate goal is twofold: to massively broaden the pool of candidate companies and sites that can be legally transitioned to democratic worker ownership if given the resources (through the right of first refusal) and to substantially deepen the financial and technical resources available to workers at companies and sites within that “candidate pool” to transition their workplace to democratic ownership.

This paper offers tools to activists and lawmakers to promote economic transformation in their own jurisdictions. The appendices offer additional suggestions and implementation details to expand our general model in the United States, where we are based, and in the United Kingdom, where similar ideas are advocated by Labour Party policy as the “right to own”—a term that we also use to describe the full proposal in this paper.5

With these policies in place, societies will be far better positioned to prevent mass layoffs as a result of the so-called “silver tsunami” of retiring baby-boomer owners of small-to-medium business enterprises, many of whom currently close their companies at retirement or sell them to extractive vulture capitalists who asset-strip the firms with little protection for workers. In many localities, extensive legal, financial and technical supports for worker ownership is the best option for maintaining community stability in the face of an inevitable and significant economic transition—one that can be reprogrammed to serve the interests of the many in order to prevent it being exploited by the few.

What the public thinks

A poll commissioned by The Democracy Collaborative with YouGov Blue found overwhelming support for a policy that would give workers the right of first refusal when their workplaces were slated for sale or closure, with 69% of respondents in support and only 10% opposed:

Unlike many proposals that aim at a more egalitarian distribution of wealth, our polling shows that a workers’ right of first refusal is wildly popular across party lines, with 66% of Republicans in support.

Our polling also tested support for a workers’ right of first refusal against support for the existing federal tax subsidies established to reward owners who transfer their businesses to employees by allowing them to defer taxation on such sales. This “1042 Rollover” is very familiar to the employee ownership sector, of course, but not widely known outside of it. Due to its origins under the Reagan administration, this subsidy to owners is often held up as an example of the bipartisan appeal of employee ownership. To our surprise, we found a workers’ right of first refusal outpolls the 1042 rollover subsidy by a 14-point margin, with only 55% of respondents in support of tax subsidies for owners who sell to their employees. Moreover, only 49% of surveyed Republicans supported the 1042 rollover, compared to the 66% of Republican respondents who expressed support for a right of first refusal.

Our polling also found that support for a workers’ right of first refusal increases and solidifies with age—while a solid 59% of 18-29 year old respondents are in support, 15% responded they were not sure. But 81% of respondents over 65 were in support, with only 4% unsure.

Finally, while support was strong across racial and ethnic groups, we found that particularly strong support with respondents identifying as Hispanic, with 78% in favor of a workers’ right of first refusal.

Download and share

originally posted on The Next System

  • 1. Marx, Karl, 1894. Capital, Vol. 3. Web: https://www.marxists.org/archive/marx/ works/1894-c3/ch27.htm; Reagan, Ronald, 1987. ‘President Reagan’s Speech on Project Economic Justice’, Transcript: http://www.cesj.org/about-cesj-in-brief/. history-accomplishments/pres-reagans-speech-on-project-economic-justice/.
  • 2. Michael, Christopher, 2017. ‘The Employee Ownership Trust: An ESOP Alternative’ in Probate and Property 31(1): p. 46
  • 3. US Federation of Worker Cooperatives, 2018. ‘The US Federation of Worker Cooperatives Celebrates the Passing of the First National Legislation That Focuses on Worker Cooperatives’. Web: https://usworker.coop/blog/usfwc-main-street-employee-ownership-act/
  • 4. Alperovitz, Gar, 2016. ‘A response to Sam Gindin’, Web: http://www.garalperovitz. com/2016/03/response-sam-gindin/
  • 5. The Labour Party, 2017. For The Many, Not The Few. Web: http://labour.org.uk/manifesto

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How We Can Reshape the Politics of Housing https://blog.p2pfoundation.net/how-we-can-reshape-the-politics-of-housing/2018/10/03 https://blog.p2pfoundation.net/how-we-can-reshape-the-politics-of-housing/2018/10/03#respond Wed, 03 Oct 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=72809 Displacement Battles on Two Continents Show How We Can Reshape the Politics of Housing Isaiah J. Poole: Communities can do more than just put a Band-Aid on the problem of gentrification and displacement, and a panel of researchers who held a forum at the Democracy Collaborative’s offices in Washington discussed the best thinking and work happening... Continue reading

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Displacement Battles on Two Continents Show How We Can Reshape the Politics of Housing

Isaiah J. Poole: Communities can do more than just put a Band-Aid on the problem of gentrification and displacement, and a panel of researchers who held a forum at the Democracy Collaborative’s offices in Washington discussed the best thinking and work happening on both sides of the Atlantic to keep housing affordable for everyone.

In a panel entitled “The Politics of Land and Housing,” The Democracy Collaborative’s Jarrid Green and Peter Gowan were joined by Laurie Macfarlane, who is based in Edinburgh, Scotland and is co-author of The Economics of Land and Housing and editor of openDemocracy. (Watch the full panel discussion below.) Together, they discussed the financial-sector-driven processes that keep housing costs spiraling upward and how we can move toward a world in which housing is a social good for all rather than a profit center for a few.

“The place that we’ve landed in is suboptimal for a whole range of reasons, and inequality is growing between those who own property and those who don’t; those who are facing higher rents and higher costs versus those who are riding the wave of increasing asset prices,” Macfarlane said.

Macfarlane stressed that “there is no single-bullet solution to what we do about this,” but the two speakers that followed laid out a set of strategies that are beginning to bear fruit either inside or outside the United States.

Gowan drew a contrast between the housing market in Ireland, which mirrors the United States in that it is driven largely by borrowing and rent-seeking, and Austria, where 40 percent of the residents live in “social housing” that is publicly owned and regulated. While in Ireland housing prices soared in the early 2000s before entering a crash that paralleled the U.S. financial crash in 2008, Austrian housing prices have remained stable throughout the past 20 years. One reason, Gowan said, is the attraction of good-quality affordable social housing to middle-class as well as lower-income households, who therefore don’t feel compelled go to into 15-to-30-year-debt to buy a home.

To Gowan, Austria’s example suggests that the US should overcome the negative stereotype of “public housing.” He concedes “there were legitimate issues” with the low-income housing built in decades past, but “that’s not to say that we can’t do better in the future. It’s not to say we can’t have a democratic community- or publicly controlled housing sector that is racially integrated, socially just and fit for the future.”

Green discussed work he did with the Alliance for Housing Solutions to help community leaders in Alexandria, Va., just outside Washington, to grapple with a market that has become increasingly inhospitable for low-income people.

The set of solutions that are being discussed around community control of land and housing, through such strategies as community land trusts, limited equity co-ops, land banks, resident ownership communities and community benefit agreements – together make up less than one percent of the housing economy in the United States, Green said. “It’s a mix of things that are approved by voters at the ballot box as well as some things that agencies can do on their own” with state or local funding. The challenge is to scale-up these solutions in the midst of what is increasingly acknowledged as an affordable housing crisis.

The strategies to address gentrification and displacement discussed in this panel will be explored more deeply in a report by Green that the Democracy Collaborative plans to release in August.

Originally published on The Next System

Photo by Ted’s photos – For Me & You

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Navigating System Transition in a Volatile Century https://blog.p2pfoundation.net/navigating-system-transition-volatile-century/2017/05/26 https://blog.p2pfoundation.net/navigating-system-transition-volatile-century/2017/05/26#respond Fri, 26 May 2017 07:00:00 +0000 https://blog.p2pfoundation.net/?p=65533 In Navigating System Transition in a Volatile Century, Michael Lewis puts forward a vision for a new global economic system built from the ground up. Structured on values such as resilience, cooperation, decentralized and democratic ownership, the commons, and dependence on nature in demand, Lewis’s model is based on “cooperative economic democracy” and the solidarity... Continue reading

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In Navigating System Transition in a Volatile Century, Michael Lewis puts forward a vision for a new global economic system built from the ground up. Structured on values such as resilience, cooperation, decentralized and democratic ownership, the commons, and dependence on nature in demand, Lewis’s model is based on “cooperative economic democracy” and the solidarity economy. To transition to this new system, Lewis recognizes the need for strategic interventions, from minimizing investments on carbon intensive services and products to the adoption of basic minimum income guarantees, debt-free money, and “glocalization” through a federation of networks, coalitions, and movements. As he explains, cooperative economic democracy and the solidarity economy are not only ends, but also important features of the transition, as they can help us effectively “resist what thwarts transition, build out the alternatives and, whether in opposing or proposing, vigorously advocate” for alternatives. Throughout his paper, Lewis also presents important examples to illustrate what can be accomplished within the current system, including the RESO initiative in Montreal, the successful worker and consumer cooperatives in Emilia-Romagna in Italy, and the Vía Campesina movement.


The following excerpt is from a post originally published on thenextsystem.org. To read the complete paper, download the PDF here.

Key Trends Defining our Time

There is a blessed unrest roiling across the planet; millions of creative, innovative, indignant, dedicated, hopeful individuals are cogitating, communicating, animating, educating, innovating, agitating, and advocating for change. Banding together in diverse groups, organizations and movements, they are trying to figure out how to navigate the unprecedented economic, social, ecological and cultural challenges of the twenty-first century.Unprecedented is the key word. Never in human history have we been challenged with the conditions we face today.Four crosscutting and interrelated trends frame and justify the claim that we are living in unprecedented times:

  1. Climate Change. The climate crisis is the preeminent threat to the survival of all living creatures. On November 23, 2015, the United Nations estimated that weather-related events in the past two decades have killed more than 600,000 people and inflicted economic losses in the trillions of dollars.1 We either grasp the nettle and get on with the difficult political, economic, and social changes necessary or, further down the line, face exponentially greater consequences. Reality dictates we cannot negotiate with the laws of chemistry and physics.
  2. Degraded and Threatened Ecosystems. We currently extract resources 60 percent more rapidly than nature’s capacity to replenish them, meaning that we would need 1.6 earths to sustain our current annual consumption rates.2 If we don’t change we will be gobbling up the equivalent of two earths annually by 2030. Ten years ago, 50 percent of the planet’s ecosystems were deemed threatened.3Once ecosystems are degraded beyond their “tipping points,” their resilience is lost—they can no longer maintain their essential structure and functions. Their services in support of life—including the sequestration of carbon—are lost.
  3. The Third Industrial Revolution: The Zero Marginal Cost Society. In the eighteenth and nineteenth centuries, coal, steam power, and the telegraph radically shrunk distance and increased connectivity. The discovery of oil, the telephone, and the automobile ushered in a second industrial revolution; time and space shrunk further. The scope, scale, and connectivity of everything exploded. The gargantuan investment in colossal power generation and distribution networks gave rise to large, vertically integrated corporations. Centralized capital and power, combined with the concentrated power within one barrel of oil, created heretofore unimaginable economies of scale. Mass production drove down the marginal cost of each unit of goods produced. The impacts were enormous. Profits skyrocketed. Costs plummeted. Cheap goods multiplied and consumption exploded, fed by technical innovations and, most important, rising wages won by workers.The third industrial revolution is radically shrinking space and time once again. The joining up of the internet juggernaut with the accelerating transition to renewable energy is revolutionary indeed. The internet alone has devastated the music and publishing industries, where the marginal cost of production and distribution fell to near zero and left the postal industry reeling as electronic delivery began to outpace traditional delivery. Hundreds of occupations are in the process of being jettisoned. An Oxford University study of over 700 occupations found that 47 percent (over sixty million jobs in the US) are susceptible to automation within twenty years.4 The precariousness of workers, already a major problem, will increase.The peril of this revolution also holds promise. Renewables will fuel the transition to a low-carbon energy. A more balanced relationship among human beings and the biosphere appears possible. Given the distributed nature of wind, sun, and tides, decentralized, distributed, autonomous energy flows could enable diverse, democratic, dematerialized, equitable, and sustainable ways of living together on the planet. Realizing this positive shift, however, is far from certain.
  4. Money, Debt, and Finance: Major Obstacles to Navigating the Transition. Massive investment in renewables and other sectors fueling the transition is central to addressing our climate and ecological crises and the accelerating precariousness of livelihoods. But how to finance those investments is a real conundrum.

The communications revolution, coupled with deregulation of the financial sector, has given rise to a worldwide casino of speculative finance ten times the value of global gross domestic product (GDP) and almost completely dissociated from the real economy or the transition challenges we face. Adding to this conundrum is the fact that governments have given over their sovereignty to create debt free money. Private banks issue 95 to 97 percent of created every time a bank issues a loan. And we the borrowers, private and public, pay the bank compound interest for the privilege, at huge cost. German researchers have estimated that 35 percent of the costs of goods and services are the embedded cost of compound interest working its way across the multitude of supply chains in the economy.5 Moreover, they estimated $600 million per day in interest payments flows from the bottom 80 percent of the population (wealthwise) to the top 10 percent.

Put all this together with stagnant wages, cost of living increases, tax revenue decreases, soaring debt, elites hiding out in tax havens, and intensifying austerity measures and the circle becomes vicious. Economic demand declines, business risk increases, and access to credit shrinks. Even so, the systemic, debt-driven compulsion to grow regardless of the limits of natural systems remains, propelling us down a MAD (mutually assured destruction) path.

Navigating our Way to the Next System: The Scope of this Exploration

Can the forces of “blessed unrest” secure fairness on a livable planet? Are the diverse innovations that we see developing and spreading merely tentative steps in the right direction, or are they vital strides towards the next system? What thwarts the scaling of their impact? What system changes could expand their contribution to a just transition to a low carbon future? These are among the questions the story we are just beginning to write must address.

It is a rich and promising story. It is also a sobering one. The contours of the next system are being revealed. But gains are hard fought. They take time, energy, talent, and resources—requirements vividly revealed in the examples shared in the following sections of this paper. Conceptually and practically, all the examples which follow can be situated under the banner of “cooperative economic democracy.” They cut across all kinds of territories, from the neighborhood to entire regions and even across borders.

Likewise, they apply to diverse sectors of vital importance to human well-being— food, energy, social care, land stewardship, and finance, to name a few. What is revealed is a rich landscape of initiatives that represent both means and ends. Their ultimate influence in ushering in the next system, however, will depend on binding these diverse actors into powerful, federated strategies to effectively press for broader system change. It is to this exploration I now turn. The broader but equally vital political and policy actions needed to accelerate transition are illustrated in the final section of this paper.

To continue reading, download the PDF here.


This paper by Michael T. Lewis, published alongside three others, is one of many proposals for a systemic alternative we have published or will be publishing here at the Next System Project. We have commissioned these papers in order to facilitate an informed and comprehensive discussion of “new systems,” and as part of this effort, we have also created a comparative framework which provides a basis for evaluating system proposals according to a common set of criteria.

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A Shareable Explainer: What is a Platform Co-op? https://blog.p2pfoundation.net/shareable-explainer-platform-co-op/2016/09/04 https://blog.p2pfoundation.net/shareable-explainer-platform-co-op/2016/09/04#respond Sun, 04 Sep 2016 11:30:46 +0000 https://blog.p2pfoundation.net/?p=59316 Cross-posted from Shareable and written by Maira Sutton, Cat Johnson and Neal Gorenflo: The sharing economy held great promise when it first emerged. It was seen as a way to help people build community, reduce unnecessary consumption, and generate extra income. It was based on the brilliantly simple notion that when we share, everybody has... Continue reading

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Cross-posted from Shareable and written by Maira Sutton, Cat Johnson and Neal Gorenflo:

The sharing economy held great promise when it first emerged. It was seen as a way to help people build community, reduce unnecessary consumption, and generate extra income. It was based on the brilliantly simple notion that when we share, everybody has more.

But this vision quickly vanished. Tightly controlled, profit-driven corporate platforms corrupted that promise with their brand of transactional “sharing” that all too often depends on externalizing the costs and risks to users and individual service providers — Airbnb hosts and Uber drivers, for example. In addition, those that create most of the value on these platforms usually have no say in how the businesses are operated. Such practices are part and parcel of an effort to grow quickly at all costs, and sometimes with the ambition to establish a global monopoly.

This drive has a number of negative consequences which undermine the admittedly great promise of these services, including poor service, racism, and inadequate safety measures. It also leads to declining trust in these companies as they appear to take advantage of users in order to reap outsized financial windfalls. Uber and Airbnb are among the most well-known examples, but these winner-takes-all “sharing” platforms are emerging in other industries across the globe.

The good news is that there is an alternative — one that places control and ownership of digital services into the hands of its users. It’s called a platform cooperative, or platform co-op.

Outline

What is a platform co-op?

A platform co-op is a digital platform — a website or mobile app that is designed to provide a service or sell a product — that is collectively owned and governed by the people who depend on and participate in it. That includes those who deliver the underlying service by contributing labor, time, skills, and/or assets. Where corporate “sharing” platforms extract value and distribute it to shareholding owners who seek a return on their investment, platform co-ops distribute ownership and management of the enterprise to its participants — those working for the platform or those using the service.

Platform co-ops bring the longstanding tradition of cooperative enterprise to the online economy. The two key traits that these digital co-ops must realize are democratic control and collective ownership. Some advocates insist that in order to be counted as a platform co-op, an enterprise must uphold the International Co-operative Alliance‘s cooperative principles.

What are some examples of platform co-ops?

Even though the concept of a cooperative enterprise is not new, there are still relatively few of them in the digital services industry. Here are three examples of successful platform co-ops.

  • Stocksy is an artist-owned cooperative that sells stock-photography. The co-op is based in Victoria, British Columbia, and is built on the idea that the artists who contribute photos to the site should receive fair pay and have sustainable careers. Artist-members license images to Stocksy and receive 50 percent commission on sales and share any surplus-income at the end of each year. The co-op was created after the founders sold their previous venture, iStock, to Getty Images. By 2014 Stocksy had a revenue of $3.7 million, and over time, it has paid several million dollars in surplus to its artists. (The images used in this article have been purchased from Stocksy.)

  • Modo is a Vancouver-based carsharing co-operative. Member-owners are shareholding members of the co-op, which means they make decisions collectively through voting. It was incorporated in 1997 with just two cars and 16 members. Today, it has more than 16,000 members and a fleet of over 500 sports cars, sedans, trucks, SUVs, vans, and hybrids — all of which are available at $4/hour through their mobile app and website. Modo is the first carshare co-op in North America.

  • Fairmondo is a cooperative online marketplace that is an alternative to eBay and Amazon. It is owned and run by its buyers, sellers, workers, and investors, and sells ethically-sourced products from small fair trade companies. Fairmondo was originally launched in Germany in 2012 as a cooperatively-owned marketplace to promote fair goods and services as well as responsible consumption. The Fairmondo team has created a federated model in which an affiliate can launch a co-op in another country using the Fairmondo brand and platform to serve the local market. The company is currently building Fairmondo UK and plans to create a global network of country-based cooperative marketplaces.

What’s the difference between platform co-ops and platform cooperativism?

The broader movement towards collective, democratic ownership of digital services is called platform cooperativism. It encompasses a wider range of enterprises because it describes a technological, cultural, political, and social transition into the next economy — from one based on shareholder-owned corporations towards one that comprises democratically-owned and controlled enterprises. The goal of platform cooperativism is to bring about more equitable conditions to the online economy, especially in regards to labor standards, transparency, and cultivation of the digital commons.

For example, if a digital services company only gives partial ownership or control to its worker-users, it is not a platform co-op. However, because it’s taking steps to broaden its ownership of its digital platform, the company could be considered as part of the platform cooperativism movement.

How did the platform cooperativism movement start?

Like most movements, it’s a challenge to pinpoint exactly when the concept of platform cooperativism came into existence. The idea came out of an emerging critique of the extractive sharing economy and is the result of numerous people’s work. An early call for a more equitable alternative came at the SHARE conference in San Francisco in 2014, when Janelle Orsi, executive director and co-founder of the Sustainable Economies Law Center, challenged corporate sharing companies to share their ownership and wealth with users.

Later that year, Trebor Scholz, associate professor of culture and media at the Eugene Lang College of the New School for Liberal Arts, coined a term that gave the movement its name in his piece “Platform Cooperativism vs. the Sharing Economy.” Scholz questioned the premise of corporate “sharing” services in which a few owners and investors are the main benefactors. Scholz suggested that instead “developers, in collaboration with local, worker-owned co-ops could design such a self-contained program for mobile phones.”

Scholz wrote:

Let us apply the power of our technological imagination to practice forms of cooperation and collaboration. Worker-owned co-ops could design their own apps-based platforms, fostering truly peer-to-peer ways of providing services and things, and speak truth to the new platform capitalists.

Days later, Nathan Schneider, scholar in residence of media studies at the University of Colorado Boulder, wrote a piece for Shareable about the platform cooperativism trend that he saw unfolding. The piece, “Owning is the New Sharing,” established platform cooperativism as a movement with many concrete examples and introduced it to our global community of readers.

Due to a burgeoning interest in the movement, Scholz and Schneider organized the first Platform Cooperativism conference in Nov. 2015 at The New School in New York City. It brought together a large, diverse group of scholars, programmers, entrepreneurs, policymakers, CEOs, and venture capitalists.

Following the conference, Scholz published a primer on platform cooperativism this year that further defined the concept with its typology and principles surrounding the movement. Schneider and Scholz are also editing a collection of pieces on platform cooperativism by more than 50 contributors. Their book, which is slated to be published in late 2016, is called Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet.

How do platform co-ops differ from corporate internet platforms?

Since platform co-ops are managed and owned by their workers and users, they are more likely to operate in a manner that puts community first. Corporate-internet platforms are legally obligated by bylaws to maximize profit for their shareholder-owners, so they are more likely to act in ways that undermine their users’ interest in pursuit of this purpose.

Due to this difference, there are many ways in which these two types of enterprise would differ. Here are a few ways, most of which were drawn and adapted from Scholz’s primer on platform cooperativism:

  • Decent pay and income security for workers: On a corporate platform, profits are often invested back into the company for further growth. Otherwise, they go to shareholders in the form of dividends, greater salaries, or financial bonuses for the company’s board members. Because co-ops are owned by the workers and users, income security is a top priority. If a co-op is doing well, its worker-owners will decide to pay themselves a fair wage. After accounting for costs and reinvestment in the co-op, any leftover income is usually divided between the worker-owners of the enterprise.

  • Transparency: Most corporate platforms are vague, or even secretive, about how they operate their business. Platform co-ops, on the other hand, are transparent with their users about how they are managed in order to be democratically accountable. They are also likely to be open about how they collect and use data, unlike major corporate services that hide behind obscure, complicated terms of use agreements.

  • Diversity: Corporate digital platforms are often criticized for lacking in diversity, especially in leadership roles, and for not addressing the needs of users from marginalized communities. Because platforms co-ops have collective decision-making processes, all users can voice concerns easily and directly and play a significant role in coming up with solutions.

  • Privacy: Almost all corporate platforms rely on user data to maximize the efficiency and profit of their services, but most of them do little to respect their users’ privacy. Platform co-ops, by the very nature of being owned and democratically-controlled by users, would be obligated to follow procedures that do the utmost to protect privacy. Because privacy is such a critical issue with digital platforms, we’ve included an extended explanation below.

How would platform co-ops handle user data differently than existing corporate platforms?

There are two key issues in how corporations handle data obtained from their users. First, algorithms can manipulate users’ data in ways that bias and discriminate against them in harmful ways. Second, there can be serious privacy implications regarding when and how much of this data is handed over to unknown third-parties like advertisers or government agencies without judicial warrants or other types of public oversight.

Platform co-ops, by the very nature of being owned and democratically-controlled by users, would be obligated to follow procedures that do the utmost to protect privacy. Sound privacy practices may include the refusal to sell or provide personal data to third-parties unless required to by a warrant and using encryption tools to ensure that data would not be intercepted or lay vulnerable to malicious hacking.

Who are platform co-ops for?

Platform co-ops are for anyone who uses the internet or mobile apps for any purpose. As people increasingly rely on the internet for professional, personal, or social reasons, it’s important that its infrastructure is designed to be robust, fair, and secure. Platforms that provide digital services, like websites and apps, are a critical part of the internet’s infrastructure, so it’s important that they are accountable to the people who depend on them.

Entrepreneurs, programmers, and designers who want to create user-centered digital services can look to the platform co-op model to ensure that their enterprises place users and workers at the core.

Who makes decisions in a platform co-op?

Usually, the rules of governance are specified by each co-op’s own bylaws, which are drafted at the time it is founded — these bylaws, however, may evolve over time.

Here are just a few ways platform co-op make decisions:

  • Voting on organizational rules: At Fairmondo, 90 percent of the stakeholders have to agree to change anything about their general principles.

  • Electing the managing board: Co-op employees have a say in electing the managing board. This incentivizes managers to be transparent and receptive to workers’ needs and critiques.

  • Using decision-making tools that enable democratic governance among a large number of users: The collaborative decision-making platform Loomio is used by Wikimedia to gauge the level of consensus among their large number of international community members. It is entirely possible that familiar online voting tools could eventually be adapted to create a seamless, accountable governance structure.

How are platform co-ops created?

Platform co-ops can only emerge out of an ecosystem of tools, institutions, and cultural norms that encourage their creation. New startup platform co-ops can be started from the ground up if they meet an existing need and can easily gain a critical mass of user participants. They can also come out of existing platform co-ops through federation or by spinning off. This is a common practice among offline co-ops.

For now, the easiest way to build a platform co-op is to start off as a conventional, investor-backed start-up, and then transition to the co-op model. After the founders of an early-to-medium stage company have gotten their platform off the ground, they could arrange a transition in which their users and other stakeholders buy the co-op from them and their investors. Although this means that the platform would start off with a corporate, top-down structure, this process allows the enterprise to first develop a user base that is enthusiastic to oversee and govern the platform into its future.

Specific rules around how to incorporate as a cooperative can vary between countries, or even states or regions. No matter where the co-op is based, it must have a set of bylaws and operating agreements that establish its principles and governance structure. The following resources may be a helpful entry point into getting a platform co-op started:

  • Co-opLaw.org: A collaborative legal resource library created by the Sustainable Economies Law Center (SELC) and the Green-Collar Communities Clinic that is specifically designed for U.S.-based co-ops, and primarily for Californians. The website provides a broad range of definitions, general guides, and sample bylaws for prospective founders to become acquainted with the process of starting a co-op. If you are based in the San Francisco Bay Area, SELC staff members host regular legal cafés where they answer any preliminary questions about starting a platform co-op.

  • The Hive: A website by Co-operatives UK and the Co-operative Bank that gives advice and training on how to start a cooperative or community business in the UK.

  • NZ.Coop on Starting a Co-op: This resource offers ideas on how to start a co-operative business in New Zealand. By becoming a member of NZ Co-Op, you can receive direct advice on the process.

Since the platform cooperative movement is still in its infancy, we welcome readers to weigh in with any insights or resources that will help us develop this explainer. Special thanks to Trebor Scholz, Nathan Schneider and Ambika Kandasamy for contributing to this piece.

Additional reading:

The post A Shareable Explainer: What is a Platform Co-op? appeared first on P2P Foundation.

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