“Reciproka facilitates the development of a co-owned network of open co-operatives through ownership transfer, network building and co-operative accumulation.”

David Bollier and I (see David’s post from yesterday) had the pleasure of meeting Janosch Sbeih and Jérôme Birolini (“The Reciprokans”) at the Open 2017: Platform Cooperativism conference in London. We were very impressed with their overall concept and presentation, it aggregates and puts a fresh spin on some of the proposals we have been discussing over the last few years regarding open cooperativism and mutalization. It also draws from Telekomunnisten’s idea of the Venture Commune for “commonifying” productive assets. The model needs refinement, careful development and feedback so it can mature into an actionable proposition, but we fully support it and are eager to see how it progresses. Here is their brief introduction to the project:

Reciproka: All over the world, inequalities are reaching alarming levels. The structural reproduction of economic inequality lies in the unequal ownership of productive assets as it maintains a distributive mechanism in which owners accumulate ever more wealth while the majority of salaried workers remain in precarious positions of dependence. At the same time, the current growth-dependent, extractive economic model is bringing us to the brink of socio-ecological collapse.

By facilitating the transfer of ownership from privately owned corporations to their employees, we can provide an opportunity for employees to accumulate more wealth through their newly acquired ownership (hence reducing inequalities) and provide greater opportunities for workers to participate in decision-making process (hence allowing for a more democratic culture). Simultaneously, local owners gain access to a mechanism to “cash out” when they want to retire, while resting assured that that their enterprises remain active and anchored in their local community, managed by the very people who have built it up over their lifetimes. Since this transition of ownership already involves an organisational restructuring, why not simultaneously rethink the organisation’s business model to make it work not only for the people who create the wealth, but also for the planet from which all wealth ultimately originates?!

A timely opportunity

The coming retirement of millions of baby boom entrepreneurs around the world represents an enormous opportunity to grow worker ownership. In the US alone, an estimate states that 671,000 middle market businesses (worth an estimated US$ 2.47 trillion) will have to be sold, closed, or otherwise disposed of between 2011 and 2029, by baby boomers[1]. This generational transfer ahead can prove to be a once in a lifetime historic opportunity to catalyse a transition towards a sustainable and community-empowering economy by providing mechanisms to transform these private enterprises into sustainable open co-operatives. The conversion of these businesses into democratic ownership models would mean a tremendous reduction of inequality and the dawn of a new co-operative and democratic era.

To achieve scale, new forms of co-operative lending coupled with technical and process support are necessary. While several organisations are already working to provide that type of service, we believe that a more systematic approach is required if we are to create an ethical and federated counter-economy able to perpetuate itself on its own.

Isolated transfers of ownerships are not enough

Unless co-operatives can be federated as a unified, ethical, entrepreneurial coalition organised around the shared goal of sustaining the commons and the commoners, we believe that isolated transfers of ownership will not be enough for the open co-operative movement to gain sufficient traction to become autonomous, therefore leaving the issue of livelihoods and social reproduction unresolved and the movement dependent on the capitalist economy (i.e. fragmented, exposed to exploitation and overall highly precarious).

In a similar vein, isolated transfers of ownership do not guarantee nor encourage the weaving of links among newly-formed open co-operatives, leaving essential features to accomplish a comprehensive economic transition – such as co-operation and solidarity – outside of their strategic scheme.

Reciproka

Inspired by Mondragon’s internal capital account (ICA) and Dmytri Kleiner`s concept of “commons-based venture funding[2]”, Reciproka holds in its core an innovative co-operative accumulation mechanism which allows for the self-propelling build-up of an ethical counter-economy while gradually providing each of its members with increasing cash transfers, representing a new kind of basic income.

Instead of assisting working people to acquire their enterprise (as most financial services organisations that invest in worker- and community-owned operations currently do), Reciproka acquires the SMEs in transition for a commons (i.e. a trusteeship legal structure) in which both consumers (i.e. citizens) and producers (i.e. co-operative workers) become members.

In addition to assuming 100% of the financial risks linked to the operation, Reciproka assists traditional privately-owned enterprise in their organisational conversion to open co-operatives, while leaving managerial autonomy to the workers. A network of experts and mentors provide the technical and process support necessary to assist with the organisational transition both from a legal, social and sustainability point of view. The enterprises in transition gain thus access to the necessary facilitation, education and mentoring resources to ensure that their newly formed co-operatives are well equipped with the governance and business models that suit their particular needs and desires.

Reciproka will look to ensure the viability of each project as well as its commitment to a low-carbon future where the well-being of people and planet are primary. Reciproka has thus written into its DNA to effectively address the core challenge of our time: the transition to an equitable society that meets everyone’s needs while living within the limits of one earth.

The result is an integrated network of mutually co-owned open-co-operatives working towards that goal, where each co-operative is at the same time autonomous while being co-owned by all other members of the Reciproka common.

This type of structure offers several benefits:

• The system gives citizens the opportunity as well as financial and social incentives to play an active part in the transition to a co-operative, ethical and sustainable economy (see www.reciproka.cc for further information on the incentives and benefits for the various stakeholders).
• The mutual ownership structure aligns the interests of the newly formed co-operatives to collaborate with each other for their own interests and the greater good of the overall coalition.
• By holding the assets in a trusteeship legal structure, Reciproka protects the ethical entrepreneurial coalition from external investors, as its assets can never be sold out.

Last but not least, Reciproka also contemplates the creation of a co-operative incubation centre for the development of new products and services and the integral support of young open co-operative entrepreneurs.

We are currently in the early stages of designing Reciproka and building up alliances for collaboration once we start operating. If you are an experienced facilitator of co-operative ownership transfer, organisational transition, interested in funding Reciproka and/or want to discuss further possibilities to collaborate, please contact us at [email protected] and [email protected].

Notes:

[1] Dennis Roberts, “Middle market investment banking offers opportunity for trained valuators, accountants,” Accounting Web, May 10, 2010, http://www.accountingweb.com/aa/auditing/middle-market-investment-banking-offers-opportunity-for-trained-valuators-accountants

^[2] A system in which co-operatives needing capital for machinery, post a bond, and the other co-ops in the system would fund the bond, and buy the machine for a commons in which both funders and users would be members. The interest paid on these loans create a fund that would gradually be able to pay an increasing income to their members, constituting a new kind of basic income.

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An excerpt from Janosch Sbeih:

“The etymology of the word ‘crisis’ tells a lot about the characteristics of such an event. According to the Oxford English Dictionary Crisis comes from the Greek word kerein, meaning to separate or cut, to make fixed, settled (Williams, 2012). The earliest registered use of the word, dating back to the 1500s, is in relation to medical and also astrological events, which were believed to be closely related. In this context, crisis describes “the point in the progress of a disease when an important development or change takes place which is decisive of recovery or death; the turning-point of a disease for better or for worse” (OED, 2014). Crisis is defined in contrast to ongoing progress – initially progress of an illness, and by the seventeenth century, “of anything” (Williams, 2012). A crisis can be understood in two ways. First, as an obstacle to be overcome, a bump in the road of progress that that needs to be dealt with in order to return to the “normal” state of affairs.

Alternatively, a crisis can be understood as the convulsion in the transition from one system to another, as a deciding phase in a change of systems. Media and governments universally frame the current crisis in the first sense, as a temporary turbulence which needs to be addressed through technical fixes in the current system. Every response is geared towards the reinstallment of a functional pre-crisis system. As we live in a growth-dependent economic system, the central question of the mass-media and policy-makers is “how do we get the economy to grow again?”. In contrast, people who are critical of the current economic system and work towards structural change tend to conceptualise the crisis in the second way, namely, as a moment that marks the transition into a new system. Long-term critics and grassroots activists often feel that their views are being validated through the crisis, as the economic system proves to be inherently unstable and governments look out only for the needs of the banking sector. People on the ground thus need to rely on each other and take matters in their own hands to save themselves and each other through the crisis. Many decide that it is time to change how the society works and push for political and economic change. The former takes shape in occupations, demonstrations and practices of direct democracy while the latter can be found in the establishment of and participation in alternative economic networks. Both are prefigurative in the sense that the movements embody the values people want to see in politics and the economy. On a small scale in the individual initiatives, they are thus already practising the changes they want to bring about in society at large. The political and economic ideas that people advocate in these movements are not necessarily new and many have been practising them already for years before the crisis. It has been argued that severe downturns tend to accelerate deep economic shifts that are already under way which is why these ideas that have been around for a while suddenly gain traction through the crisis (Williams, 2012).

Edgar Morin (1976, 1984) who advocated in the mid-1970s the development of the scientific study of the crisis as such (“crisology”) suggested that a crisis can be an event that both reveals and has an effect. It reveals what usually remains invisible; it forces us to see things that we are usually unwilling to confront. The crisis reveals aspects that are inherent to reality and are not merely accidents; it constitutes a moment of truth. In the current case, it can be said that the crisis reveals unbridled capitalism, in particular financial capitalism, in all its brutality and its extreme injustice (Wieviorka, 2012). Above all, it reveals the dynamics of debt which structure our global economy to a large extend while at the same time destabilising it and stripping it of resilience. It is interesting to observe that in this context the Bank of England published for the first time a report that openly states that money is created ex nihilo as loans by private banks (Graeber, 2014). The crisis thus reveals threatening dynamics that have been going on long before 2008. As an event that has an effect, Morin considers that a crisis sets in motion not only forces of decomposition, disorganisation and destruction, but also forces of transformation (Morin, 1976, 1984). In these cases it is also a critical point in a process that includes dimensions of construction, innovation, and invention. The focus of my dissertation is the transformational dynamics of alternative economic practices that this particular crisis fuels and set in motion. Continuing the idea that a crisis both “reveals” and “has an effect”, Edgar Morin invites us to admit that the crisis demonstrates that what a matter of course was is in fact a source of difficulties and presents problems: what worked had its limits, its drawbacks, and its inadequacies. The crisis therefore constitutes an incentive to invent something new; but an incentive that is imperative as the system that previously helped us structure our lives became deeply dysfunctional and cannot further be relied on.”

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