Robert Raymond: We are witnessing the rise of a solidarity economy movement, stretching from the Atlantic to the Pacific, including organizations like Cooperation Worcester in Massachusetts, Cooperation Humboldt and Cooperation Richmond in California, and Cooperation Jackson in Mississippi, among others. One of the leaders of this movement is Kali Akuno, co-founder and co-director of Cooperation Jackson, who recently wrote a book titled “Jackson Rising: The Struggle for Economic Democracy and Black Self-Determination in Jackson, Mississippi.” Akuno was born in Los Angeles, California, and grew up in a working-class community where he watched the devastation brought by deindustrialization and the gang wars that hit L.A. in the 1970s, 80s, and 90s. His family was deeply involved in various social movements, particularly the Afrikan People’s Party. Akuno was raised in a world marked by violent poverty, as well as radical activism. Akuno moved around in California and eventually wound up in Jackson, Mississippi. We spoke with Akuno about his work with Cooperation Jackson, the broader solidarity economy in general, and what particular challenges working-class African American communities are experiencing in the deep south.

Robert Raymond, Shareable: So how did you end up in Jackson, Mississippi, as director of Cooperation Jackson, having been born and raised in California?

Kali Akuno, co-founder of Cooperation Jackson: So, I have a kind of varied background, particularly leading up to Cooperation Jackson. it really started in the early 2000s when I was the director of the School of Social Justice and Community Development in Oakland, California. During the second year of that project, I just woke up one night with a terrible nightmare. The nightmare was about, what were we really doing to prepare the kids we had recruited, in terms of a job, in terms of opportunity? Just kind of recognizing that given the shift of the economy that much of what we were preparing for was going to be rapidly becoming obsolete and that this was a population that was going to become increasingly more and more disposable.

I just woke up feeling like I kind of set these kids and their parents up with false hopes and false expectations. I just couldn’t live with that. So I started on a journey trying to figure out what could be done. What could working-class people — particularly black working-class people — what could we do to put more direct control and power in our own hands, toward shaping the economy, creating the economy that would serve us and serve our needs. That led me back to a road of really looking at and analyzing worker cooperatives and other types of solidarity economy institutions.

So then from that, I was a member of the Malcolm X Grassroots Movement and the New Afrikan People’s Organization, and it was in the course of mid-2000s where we developed what became known as the Jackson-Kush Plan [a vision, starting in 2007, put together by a number of different organizations, including the Jackson’s People Assembly, to create jobs with rights, dignity, and justice that generate wealth and distribute it equitably based on the principles of cooperation, sharing, solidarity, and democracy].

One of my major contributions to that plan was really incorporating the Solidarity Economy framework within it and contributing what I had studied from a deep, deep dive into a study of the Mondragon and Emilia Romangna cooperatives — as well as some of the work that was being done by that Zapatistas. So, I just really brought that to the fore and tried to incorporate that within the Jackson-Kush Plan, which eventually wound up becoming a core component of debate and study within that organization. As we launched a major phase of that plan’s execution in 2013 with the with the election of Chokwe Lamumba to Mayor of Jackson, one of the main things that we were trying to move and shift as a result of pursuing that office was changing some of the municipal policies to make it so that it would be easier for a grassroots communities, working-class communities, to actually develop cooperatives to make a contribution towards the local economy, but also to put more direct control in worker hands. Unfortunately, Chokwe died shortly after, too soon before we could really execute what we all had in mind in terms of those policies. But the plan to move forward and to try to execute that vision, that moved forward and that became Cooperation Jackson. So that’s kind of how I got involved, and that’s part of the core genesis of how Cooperation Jackson got started.

So how would you describe Cooperation Jackson today?

Cooperation Jackson is an emerging network of cooperatives supporting solidarity economy institutions that are working to transform Jackson, its economy, and the social relationships. It’s starting with the establishment of more equity in the community but overall it’s trying to end some of the old school, longstanding differentials in the power that exists in the economy here locally. But to also be a model of the transformation of a more ecologically and regenerative way of doing production and putting the means of production directly in the hands of members of the community. So that’s just a short bit of what we’re trying to do, what we’re aiming to do, and what we’re on the on the road to do.

What do we need to know about Jackson, Mississippi, to understand why this project is so important?

Some key things I think to understand about Jackson, Mississippi. Number one: it’s the capital of the state of Mississippi, it’s a city roughly about 200,000 people. It’s over 80 percent black. If you follow the federal regulations, it’s overwhelmingly poor with more than twenty percent officially below the federal poverty line. We would argue that the real unemployment rate is between forty and fifty percent.

And then we exist in the larger context. This is the largest city in Mississippi, but it exists as a progressive bubble in a very red and ultra-reactionary state. … I think to understand Jackson and what’s been going on here, and some of the success that we’ve had, is that we’ve been living with the politics that everyone else is now also experiencing with the Trump regime — the kind of virulent racism, the outright misogyny, you know the viciousness, we’ve been living with that for quite some time. That has been the norm and order of the day here in Mississippi for well over 50 years. Not much has really changed in that regard into the politics.

It produces a certain level of clarity that you have in the community’s minds about what their interests are, and who’s opposed to those interests, that I think has made some of the different aspects of the work that we’ve been trying to do somewhat simple. That clarity enables our work to really move in a way that may be a bit harder in other communities. That’s a critical thing to understand. That doesn’t mean that there’s still not a great deal of organizing work that has to happen, but for us, trying to convince people that there are problems is the easy part — that you don’t really have to sell to anybody. The challenging part is what is your solution and is it viable? That is where there’s a lot of organizing work that has to be done to convince people that doing economics in a different way is a viable alternative that can challenge the stranglehold of the powers that be. So, first and foremost, we’re putting forward as solid a vision as we can to get people to see a different future as possible, and then to work our way towards building the models and the institutions that we need — to actually live, breathe, practice, and embody the vision that we want to see.

What is the connection between cooperatives and economic democracy in Jackson? And what other new economics interventions are you exploring?

A core element that cooperatives speak to are questions of self-reliance and self-sufficiency, particularly regarding historically oppressed, exploited, and marginalized communities. In order to change that situation it has to start from within, and with the resources and the talents that you yourself possess. We’ve got to be very clear that there are no external saviors coming to save the day. And that our liberation is in our own hands ultimately. So just starting with the clear foundation which I think Mississippi brings to bear every day, that the search for solidarity really starts within, within your own community and folks who are sharing similar experiences. So that kind of foundation runs through the black community particularly here given the circumstances I just described.

Another key thing that I will say is that the solidarity economy is not something that we have to invent or parachute or convince people of. Given the vast majority of people’s economic situation, if there wasn’t some level of solidarity that people were practicing — particularly with their families and their extended loved ones — many people just wouldn’t make it through the day or the month. You know, paying bills, eating, providing child care support to each other. There’s a great deal of solidarity that already exists as an informal solidarity economy, and what we’re just trying to do in many respects is to build on that foundation and move it from an informal set of practices and relationships to a more formal set of practices and relationships, and create a dynamic wherein, you know, people can exchange, trade, and barter, and still share with each other across familial relationships or just basic communal relationships. And trying to scale that up so that we can do time-banking, perhaps throughout the city in the next couple of years. We’re also working on an alternative currency. You know, so this organic composition already exists in that community and our challenge is how to connect it much more explicitly to the formal piece.

It really sounds like Jackson is up against a lot, with the far right in political power and having been entrenched in a kind of structural racism for decades — centuries. Do you think that things like alternative currencies, or even cooperatives alone, can transform the economy of a place like Jackson?

So, that is where the politics have to come in very clearly, and where we try to interject them very clearly. It’s to say that we’re not just trying to build cooperatives for cooperatives’ sake. We’re trying to build vehicles, very explicitly and very intentionally, of social transformation. What we’re trying to do is fundamentally change the relations of production in our community. If people can create their own livelihood, I won’t say business, because it’s more than just business — but if we can create and control own livelihoods, it eliminates the long legacy of exploitation, of abuse, that people — particularly black people — have suffered in this community.

We believe that you have to have very explicit and intentional politics that goes along with the development of cooperative businesses and enterprises, so people are very clear on why they are trying to build a certain level of equity and what we hope that will lead to. You know, if we change the social relationships, we change the balance of power in this society and remove people from being in positions of dependency — particularly economic dependency — and move them to places of being able to exercise real strength because, say, they control their own resources and they’re not afraid of somebody kicking them out of their house, or they’re not afraid of somebody firing them from a job. That control gives you far more power to say what you want, and to do what you want, and to exercise your own will when you control those fundamental basics.

This Q&A has been edited for length and clarity.

Hear more from Kali Akuno in Upstream’s latest episode — part two of their worker coop series. Listen to the episode here.

Header image of Kali Akuno courtesy of Cooperation Jackson. 

The post Cooperation Jackson’s Kali Akuno: ‘We’re trying to build vehicles of social transformation’ appeared first on P2P Foundation.

But above the surface, islands dot the horizon. Green, lush sanctuaries. Islands of alternatives. Movements and communities rethinking ownership, dismantling hierarchies, prioritizing cooperation and generosity, and putting people and planet before profit. The islands are there, if we know where to look for them.

In Episode 2 of this highly-acclaimed 2-part series on Worker Cooperatives, the Upstream podcast builds on the conversation started in Episode 1, which explored how co-ops can serve as a force to widen spheres of democracy within our society. Episode 2 shifts the focus outward, exploring how cooperatives navigate the tumultuous waters of global capitalism.

The episode takes a deep dive into the Mondragon Cooperative Corporation, the largest network of federated cooperatives in the world. The Upstream team takes listeners on a journey through the Basque region of Spain where Mondragon is located, and explores Mondragon’s successes and challenges through candid conversations with several worker-members at Mondragon Headquarters and at various cooperatives within the federation.

After presenting an in-depth exploration of the recent and mixed history Mondragon, Upstream takes us across the Atlantic to Jackson, Mississippi, where an ambitious iniative is just getting underway. Cooperation Jackson is part of the same trans-local organizing movement that inspired Cooperation Richmond—which was featured in Episode 1. Cooperation Jackson aims to be the Mondragon of North America, and in doing so has learned many lessons that will hopefully help them to succeed in their broad economic and political vision of Black liberation and the eco-socialist transition away from capitalism.

Featuring:

• Kali Akuno — Co-founder and Co-director of Cooperation Jackson
• Gorka Espiau —Senior Fellow at the Agirre Lehendakaria Center at the University of the Basque Country
• Sam Gindin — Writer, Director of Research at the Canadian Auto Workers (retired), Professor of Political Science at York University (retired)
• Ander Exteberria — Cooperative Dissemination at Mondragon Corporation
• Izaksun Ezpeleta — Worker/member at Fagor Electronics
• Andoni — Worker/member at Fagor Ederland

Music By:

• Chris Zabriskie
• Will Stratton
• Mississippi Sheiks

This is part 2 of a 2-part series. Listen to Episode 1 here.

Upstream is an interview and documentary series that invites you to unlearn everything you thought you knew about economics. Weaving together interviews, field-recordings, rich sound-design, and great music, each episode of Upstream will take you on a journey exploring a theme or story within the broad world of economics. So tune in, because the revolution will be podcasted.

For more from Upstream, subscribe on iTunes, Google Play, or Stitcher Radio. You can also follow Upstream on Facebook, Twitter, and Instagram to get daily updates.

Header graphic by Phil Wrigglesworth

A version of this blog post was originally published by Shareable.

The post Podcast: Cooperative Islands Within a Sea of Capitalism appeared first on P2P Foundation.

Robert Raymond: Lying a few miles south of Marin County and just across the bay from San Francisco, the city of Richmond, California, is situated within two of the wealthiest regions of the United States. Richmond, however, does not share in this wealth. Its downtown has been largely abandoned and its northern periphery is on the front lines of the Chevron Richmond Refinery, processing over 240,000 barrels of crude oil every single day and creating a toxic environment to those living in the surrounding vicinity. It’s an example of what we know as a “sacrifice zone” — a community that has been largely incapacitated by environmental damage and economic neglect.

But in the shadow of the looming refinery, and within the spaces between boarded up storefronts and abandoned lots, something is stirring in Richmond. Residents, organizers, and activists have come together to create an incubation hub for community revitalization and resilience. They call themselves Cooperation Richmond, and their aim is to empower the marginalized and exploited residents of this city to build community-controlled wealth and wellbeing.

Founded in October of 2017, Cooperation Richmond is plugged into a broader national movement that includes similar initiatives like Cooperation Jackson in Mississippi. These initiatives have largely been inspired by the Mondragon cooperatives, a highly integrated network of cooperatives that form a self-supporting ecosystem in the Basque region of northern Spain. Like these other initiatives, Cooperation Richmond’s mission is to build a cooperative economy that puts people and planet before profit. It does this through providing education, coaching, and both credit and capital development to cooperative businesses in Richmond.

Robert Raymond spoke with Doria Robinson and Gopal Dayaneni of Cooperation Richmond about their work and the importance of the growing cooperative movement in Richmond and beyond.

Robert Raymond: There’s been a buzz around a new book recently written by Kali Akuno of Cooperation Jackson titled “Jackson Rising: The Struggle for Economic Democracy and Black Self-Determination in Jackson, Mississippi.” I actually found out about Cooperation Richmond when I heard that one of your board members, Najari Smith, was going to be interviewing Kali Akuno during a book tour stop in Oakland. Can you tell us about Cooperation Richmond, what you see as your mission, and how you are connected to a broader cooperative ecosystem that includes, among others, Cooperation Jackson?

Gopal Dayaneni: Cooperation Richmond is a really good example of what we call trans-local organizing — autonomist, place-based organizing with a unifying vision, shared strategies, and common frames. We are connected with many other organizations who are doing or supporting cooperative development and who are all connected by a common vision. It’s a movement that is trying to build meaningful infrastructure for economic democracy in order to build a new kind of political power. We want to actually transform the very nature of the economy and of governance in our communities — that’s what we’re engaged in.

And so Cooperation Richmond is an organization that we have developed for the purpose of supporting worker-owned and community-owned cooperatives in Richmond, California, which is one of the poorest parts of the Bay Area — a majority people of color community. We provide coaching, connections, and capital. We’re focused on folks who are most excluded from the dominant economy, folks who we think should be the foundation of building the next economy.

Doria Robinson: The idea behind Cooperation Richmond is that we’re taking somebody from a place where they’re just getting started, somebody at the point where they really want to make an impact, and they want to take charge of their lives, but need some help making it happen. Maybe they have an idea for a business, but they don’t have much more than that idea. We’ve structured Cooperation Richmond to basically take it from there, to help them take it to the next stage.

You launched Cooperation Richmond less than a year ago, but you’ve already played an important role in fostering cooperative workplaces and community engagement in Richmond. Can you tell us about your first initiative?

Doria Robinson: Our pilot project was Rich City Rides, a bike and skate shop. It’s a really powerful story. It’s a small bike and skateboard shop in Richmond, a place that had no real bike shop. Before Rich City Rides, if you wanted to do any repairs to your bike, you had to go to Walmart or Target, which are not exactly bike repair places. That was it.

You know oftentimes bikes are associated with gentrification, or kind of an elitist kind of thing you do on the weekends. In Richmond, it’s really different. People can’t afford cars. Not a lot of people in low income communities have cars, or if they do, their car is constantly breaking down. So they’ll default to riding a bike just to get to work or just to get to the store, just to go get around. So people actually really needed to have a good place to be able to fix their bike. And so people mostly just threw out their bike if they got a flat — they would literally throw their bike out. It was painful to see. Or it would just sit in the garage once it had something wrong with it, and that was it. There was no access to any kind of bike tools or anything like that — people literally had no way to fix their bikes.

So three young men started to run a loosely associated collective bike shop out of different spaces that they could find. They worked out of a storage space for a while, they had a kind of pop-up bike shop going on for a while. They were finally able to get into a retail space across from the Richmond BART station, a space on the main street that had been boarded up for years. Rich City Rides was the first place that really started to revitalize the main street. I think it was one of the only places that’s locally owned on that block as well. But they were really running a pretty substantial business at that point with very little resources, and they needed capital. They also needed a facelift — the shop looked like somebody’s garage.

So we took them on and worked with them to create an action plan to strengthen the business. We got them their first loan and helped them incorporate as a California Cooperative. So now Rich City Rides is leading the effort to completely transform and revitalize the downtown, to create this opportunity for people to have healthy transportation; healthy in terms of environment and in terms of your own body. So yeah, it’s kind of an honor to just see them carry this vision forward.

And why is the cooperatives structure important? What role do they play in the broader mission of creating the next economy?

Gopal Dayaneni: Well there’s a few different pieces of that. So the first is that bosses just suck. You don’t need them. All wealth is generated through the work of the living world. Making money off the movement of money is just extraction of wealth from other people. So the idea of all of us being able to voluntarily co-participate and control our own labor to meet our needs — and the needs of our communities — is very important.

It’s also important to share that wealth. Creating commons of wealth and commons of resources is a necessary element of the transition that we need to be in. The dominant economy extracts wealth from the living world, and it begins with extracting wealth from our own work. And so in order to both confront that, but also to build a new kind of muscle memory, a knowledge of how to be in the world, to actually practice self-government on a daily basis, we need institutions and infrastructure that can do that.

The second part of it is really that cooperatives allow us to do things that the extractive economy won’t do. For example, we would never exclude folks because they were formerly incarcerated — because we don’t believe humans belong in cages. We would never exclude folks based on their their status as documented or undocumented because we recognize the border as an enclosure enforced through violence that fragments ecosystems and communities. So we are able through cooperation to actually live our values in a way that is foreclosed upon in the dominant economy, and particularly for those who are most excluded by the dominant economy.

Doria Robinson: I think that there’s some really vital things that being in a worker owned cooperative can provide. Democratization of the workplace is something that can’t be underestimated. In a worker cooperative, that’s really run through democracy, folks are voting through each owner having a say in the day to day decisions as well as the trajectory of the enterprise. That’s a really big deal, especially in communities like Richmond where power has really been taken out of the hands of the people. This transition of decision-making and profit-making back to the people — the transition of accountability and responsibility — is truly transformative.

If you take somebody who has never been in a place where what they do actually matters, where their whole livelihood actually depends on them completely showing up and making decisions — that’s transformative. And then once you start to get a taste of that it spreads and you don’t want to stop. As soon as people really get a taste of being in a position to make decisions that impact themselves and their community, it begins to extend out to other things. It doesn’t just stay within the realm of the workplace. You begin to realize that, for example, the city government impacts you. Or that decisions made around the streets impact you. You start to realize that you actually do have a voice in shaping the things that impact you, and that you can stand up and advocate for things. I think that is one of the most powerful and important reasons why we chose to focus on cooperatives. We want to thoroughly empower people in every place and in every way.

Gopal Dayaneni: Like I said earlier, Cooperation Richmond is part of a larger “just transition” vision and process taking place in Richmond but also in lots of other places in the United States and around the world. The idea is that for there to be meaningful political democracy, there has to be economic democracy. So the idea is not only about creating sustainable livelihoods in the workplace but also being able to reimagine the very nature of the work that we do and how we do it. So we could support worker-owned cooperatives that just do absolutely anything, or we could prioritize those that have ecological and social value. We do the latter. So Rich City Rides, for example, is not just a bike shop, it’s not just a bike shop run by folks who are normally excluded from the economy — you know, young men of color from Richmond — but it’s also an organized bike shop that supports community bike rides, transit justice, and bike safety. It’s really committed to a larger vision of reimagining our relationship to place, to home, and to the economy itself.

This Q&A has been edited for length and clarity.

Header image of Doria Robinson and Gopal Dayaneni by Robert Raymond/Shareable

The post How Cooperation Richmond is empowering marginalized communities to build an equitable economy appeared first on P2P Foundation.

“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 jerome@reciproka.cc and janosch@reciproka.cc.

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.

Photo by ganast

The post Reciproka: Facilitating Open Cooperativism appeared first on P2P Foundation.

“Historically, U.S. trade unions have not been supportive of the worker-consumer cooperative model for employment. But that, too, is changing. The United Steelworkers Union has entered into an agreement with Mondragón to assess the feasibility of union-sponsored cooperatives. To date, this exploration has yielded positive results with the formation of several worker-consumer cooperatives facilitated by the union, including cooperatives specializing in energy efficiency and food wholesaling.”

This is the third of a series of posts on post-consumerism. It was authored by Dean Maskevich and originally published at the New Jersey Institute of Technology site.

For a significant part of the 20th century, the Manufacturing Economy generated unprecedented material prosperity in the United States. Then, as well-paying factory jobs migrated to corners of the world where labor is much less expensive, it was the Information Economy or the Service Economy that provided gainful employment and enabled the consumption underpinning our national and individual well-being.

Today, in the 21st century, upbeat discussion now promotes the “Gig” or “Sharing” Economy as offering both personal freedom and financial rewards for those of us who pursue the entrepreneurial promise typified by Uber drivers or the income to be gained from opening our homes to Airbnb customers. However, the current national debate over income inequality and the economic stresses experienced by more and more individuals in the U.S. and other countries may signal movement toward another form of economic organization — the Cooperative Economy. It’s a possibility that Professor Maurie Cohen posits as a faculty member in NJIT’s Department of Humanities and director of the Science, Technology and Society program.

Considering Post-Consumer Realities

In articles, talks at conferences, and classroom discussion, Cohen takes an analytical look at life in the emerging post-consumer world. He also explores the topic at length in a forthcoming book, The Future of Consumer Society: Prospects for Sustainability in the New Economy. Recently, he shared his thoughts on sustainable consumption in Stockholm, Sweden, at the invitation of MISTRA, the Swedish government’s funding foundation for environmental research. Over the past few years, MISTRA has established “outwardly looking” research centers at several Swedish universities, including one focused on sustainable finance at the Stockholm School of Economics.

“There’s growing recognition that contemporary forms of consumption entail deeply rooted social and ecological problems and present significant political challenges,” Cohen says. “What we regard as the consumer society is coming under significant stress caused by demographic ageing, changes in our society’s consumption profile, and growing income inequality. Due to stagnant wage income, increasing numbers of people are losing their capacity to consume, which for many decades has been viewed as the path to personal happiness and national prosperity.”

In Europe, Cohen observes, there is greater willingness to consider governmental action with respect to mitigating the effects of declining capacity to maintain post-World War II patterns of production and consumption. This commitment includes consideration, however tentative, of providing people with some form of guaranteed basic income. The concept is comparable to a nationalized version of the Alaskan Permanent Fund in the U.S., which makes an annual distribution to residents of Alaska based on income from the state’s oil revenues.

In June, Switzerland will put the concept of a guaranteed basic annual income for all citizens to the test of a national referendum. Nonetheless, the economic impact persisting from the Great Recession continues to constrain even countries more receptive than the U.S. to implementing government policies aimed at positive social adjustments, policies that many legislators now deem too costly. The result is rising anger and personal economic apprehension fueled by a decline in well-paying jobs for reasons that include globalization.

In France, for example, the surprising — or perhaps unsurprising — popularity of a satirically biting documentary that opened in February exemplifies how so many people who once felt materially comfortable now view their situation. The film is Merci Patron!, which translates as Thanks, Boss! The creator, François Ruffin, credits Michael Moore’s equally acerbic Roger & Me as a prescient inspiration. In both films, an earnest picaresque protagonist tries to question the head of a major corporation about business decisions made at the expense of workers and communities — the multinational luxury goods conglomerate LVMH in Merci Patron! and General Motors in Roger & Me, which chronicles the decline of Flint, Michigan, as jobs in the automotive industry vanished.

Post-Consumer Possibilities 

“So what is the alternative if the ability of people to support themselves and their families with wage income is collapsing, and there’s not much chance of substantial help from the government?” Cohen asks. One possibility is rooted in the evolution of a concept that garnered significant interest in the past — mutual economic cooperation at the local or regional level.

Historically in the U.S., this has involved consumers joining together to establish — and jointly own — mutually beneficial enterprises. By 1920, there were more than 2,000 general stores that were consumer cooperatives. In the 1930s, President Franklin Roosevelt’s New Deal encouraged the creation of electric power cooperatives that brought the benefits of electricity to millions of people. Credit unions are another example of such cooperative engagement, and an enduring legacy of the New Deal.

But the benefits of these cooperative economic enterprises accrue mainly to their consumer-owners. In the 21st century, Cohen suggests, a more balanced social equation offering even broader benefits — particularly job opportunities — might be implemented through worker-consumer cooperatives. In the post-consumer world, such organization could contribute to a more sustainable system of production as well as consumption.

A degree of worker participation in the ownership and governance of the organizations they work for also is not new in the U.S. Employee stock ownership plans are an example. However, the concept of the worker-consumer cooperative goes much further, with the workers in what Cohen calls a “multi-stakeholder” enterprise having total responsibility for collective management decisions. At the same time, he emphasizes, people would have a much greater financial stake in the enterprises they work for as well as buy from.

A Challenging Alternative

Some worker-consumer cooperatives do operate successfully in the U.S. today. However, as Cohen says, they tend to be “micro-sized” — a grocery cooperative in North Carolina and a craft brewery in Texas, for instance. In Europe, on a considerably different scale, the largest worker-consumer cooperative in the world is the 800-store Eroski supermarket chain, a subsidiary of the Mondragón cooperative based in the Basque region of Spain.

Historically, U.S. trade unions have not been supportive of the worker-consumer cooperative model for employment. But that, too, is changing. The United Steelworkers Union has entered into an agreement with Mondragón to assess the feasibility of union-sponsored cooperatives. To date, this exploration has yielded positive results with the formation of several worker-consumer cooperatives facilitated by the union, including cooperatives specializing in energy efficiency and food wholesaling.

The interest that New York City is taking in the cooperative model reflects the potential for additional support at the level of municipal government. The city is currently providing organizational assistance for cooperatives as another strategy for fostering economic development.

The concept of the worker-consumer cooperative is definitely generating interest as a socially innovative addition to the evolving range of routes to personal economic security. At the same time, it’s an alternative to more conventional employment that presents significant organizational challenges. For example, there is the question of which businesses on the present-day economic landscape would be amenable to this organizational form, and would financing for moving a worker-consumer cooperative from proposal to operation be readily available.

Management structure is another major consideration. Ideally, Cohen says, a cooperative operates on the democratic principle of each member-owner having one vote when it comes to the many decisions that must be made to facilitate success. In theory, a cooperative will succeed only if the participating individuals are fully engaged in managerial decision-making — to very regularly “come together over the back fence” for discussion and decision, as Cohen puts it.

It’s legitimate to question the practicality of such organizational democracy when it comes to large, complex enterprises, Cohen notes. “Since it can be difficult to motivate people to become fully engaged cooperativists, there is often a tendency to veer toward professional management. So at the operational level there might not in some cases be a significant difference between firms that are conventionally organized and those that are cooperatively organized.”

In Cohen’s estimation, the loss of economic security that our society once offered makes it necessary to weigh the pros and cons of alternatives to what we thought would always be the path to the good life in the workplace and the supermarket. However challenging, one of these alternatives may very well be participation in a cooperative both as a worker and a consumer.

By Dean Maskevich

dean.l.maskevich@njit.edu

The post Is the Cooperative Economy Next in a Post-Consumer World? appeared first on P2P Foundation.

10 Cities Investing in Healthy, Sustainable & Equitable Growth

City governments are shaping up as key actors accelerating worker co-op development. It started in 2009 when the City of Cleveland accessed a federal guaranteed loan to help finance the Evergreen Cooperatives. Since then, nine more city governments have moved to promote worker cooperatives through municipal projects, initiatives, or policies because they want to reach people and communities often left out of mainstream economic development. Other city governments including Philadelphia are considering it now.

Getting worker cooperatives to the scale of being a real market alternative will take time, energy, and the sort of experimentation we are seeing from these ten cities. A recent Imagined Economy Project report, Cities Developing Worker Co-ops: Efforts in Ten Cities, explores how city governments are thinking about their strengths in making worker co-ops structural features of local markets.

Traditional economic development, said Madison, Wisconsin’s Ruth Rohlich in the report, “isn’t helpful in creating really healthy communities, financially strong communities, in an equitable way.” Worker ownership may be a way forward, and city experiences right now will help municipalities decide how worker co-ops may become long-term features of their economic development agendas. To commit to worker cooperative development long term, the cities will need to see modest growth in jobs and business ventures resulting from their current efforts and may benefit from input and insights from worker cooperatives as they continue to adjust their sense of best practices.

Cleveland and New York Leading the Way through Distinct Approaches to Worker Co-op Development

The City of Cleveland ventured into worker co-op development in response to a Cleveland Foundation initiative to set up a network of worker cooperatives connected under a corporate umbrella that planned to supply needed goods or services to hospitals, universities, or other anchor institutions. “I heard about it just in passing,” said Cleveland’s Economic Development Director Tracey Nichols quoted in the report, and the word of mouth led to the first instance of a city getting involved in worker cooperatives in a big way.

The main way the City of Cleveland assisted the initiative was by accessing millions of dollars in federal guaranteed loans and some federal grant funds as startup capital for the Evergreen Cooperatives. In so doing, the city produced the contours of one municipal approach to worker co-op development, termed the anchor approach in the report, whereby the city government role is mainly to finance startups and resolve underwriting risks in what are considered unconventional projects. In Cleveland, Nichols used tax increment financing and set aside the non-school portion of payments in lieu of taxes as a debt reserve for loan repayment to minimize risks to the city.

New York City is the nation’s second large scale municipal effort to bolster worker cooperative development locally. Instead of helping build worker cooperatives as part of anchor institution supply chains, New York is one of five cities taking an ecosystem development approach in the vein of the Democracy at Work Institute (DAWI). A worker cooperative ecosystem, according to a Democracy At Work Institute and Project Equity report, is a series of interacting elements including but not limited to cultural/entrepreneurial familiarity with worker co-ops, supportive laws, customers, capital, technical assistance, and professional service providers that help worker cooperatives emerge and survive.  As part of its Worker Cooperative Business Development Initiative, New York committed to funding a collaborative of cooperatives — there were eleven funded in 2015 and fourteen in 2016 — to spread general awareness of the worker cooperative business form, incubate new or converted worker co-ops, and support existing worker co-ops with matters like drafting by-laws, accounting, Board development, and employee participation strategies. The City itself also became part of the ecosystem when it began offering a “10 Steps to Starting a Worker Cooperative” course through its Small Business Services Solution Centers.

The separate approaches have produced modest results, with the three Evergreen Cooperatives for-profit startups employing 113 people (38% member-owners) over several years and New York’s initiative leading to 21 new worker cooperatives involving 141 worker- owners in its first year. While the wage and earnings statistics specific to the co-ops developed through these municipal efforts are unavailable, a Sustainable Economy Research Project report found that worker co-ops in New York pay an average of $25.00/hour but apparently offer less than full time opportunities; the average annual income earned in New York’s worker cooperatives is $18,000.00 according to that report, mostly involving women of color. Current wages and earnings in the Evergreen Cooperatives are also unknown, but 98% of those employed by the three ventures are Clevelanders, 100% are racial or ethnic minorities, and 47% are returning citizens, Evergreen Cooperatives’ CEO John McMicken offered in an email.

Both municipal approaches have been inspirational to other cities. Rochester, New York and Richmond, Virginia are at various stages of planning for municipally-supported anchor-linked worker cooperative projects as part of broader poverty-reduction efforts, while Richmond, California, Madison, Wisconsin, Minneapolis, Minnesota, and Austin, Texas are working to bolster and expand worker co-op ecosystems in their cities.

Spread to New Cities Leads to Evolution in the Approaches

The ten city governments are attracted to worker cooperatives as sources of quality jobs, as well as ways to build wealth for individuals and divested communities. Accomplishing those goals will be a matter of “adaptive management,” assessed Berkeley’s Brandi Campbell, as they know they have much to learn. Ultimately, cities want sustained growth of individual co-op businesses as well as multiplier effects in the local economy to result from their investments in worker co-op development. These may be tall orders for geographically-dispersed cities with very different experiences with worker cooperative or broader social enterprise cultures, and the city governments are aware that they will need to readjust their approaches and planning as they learn how to develop worker co-ops by doing it.

Part of learning by doing involves learning from each other. The city governments are motivated to apply lessons from other city experiences as well as from the broader cooperative or co-op developer community. Most of the ten cities active in worker cooperatives are connected with expert consultancies that are playing key roles in helping inform municipal efforts and also bringing insights from other local projects or initiatives with them as they help additional city governments develop their desired approaches to worker co-op development. Certainly, ideas about how municipalities can be most effective in worker co-op development are cross-pollinating, and this has resulted in some evolution of what can be called the Cleveland and New York models of worker co-op development as additional city governments work through the place-based opportunities and challenges related to emulation in their own local areas.

Evolution in the Anchor Approach — from Cleveland to Rochester

The city role in the anchor-linked approach to worker co-op development started in Cleveland as primarily financial, but the newer cities are taking on expanded roles. In both Richmond, Virginia and Rochester, city governments have initiated anchor-linked worker co-op projects from City Hall, so their roles have evolved to include finance but also conceptualization, planning, and active participation in setting performance targets.

Rochester is further along than Richmond in its planning, already having completed a feasibility study in consultation with the Democracy Collaborative or the main architect of Cleveland’s Evergreen Cooperatives. Working with the Democracy Collaborative, Rochester has been able to build upon the lessons from the Cleveland experience. Certain alterations have been built into Rochester’s anchor approach that, ultimately, may help minimize financial risk and potentially allow for quicker growth of the supportive infrastructure built through the corporate umbrella.

First, the City of Rochester is acting to influence the business mix. Said Henry Fitts, Director of Innovation for the City of Rochester, “A lesson learned from the Evergreen experience has been that high-capital startup businesses are a lot more difficult to accomplish through this model.” Rochester is interested in focusing more of its business starts on lower-capital, service-based businesses. For instance, only one of Rochester’s five potential worker cooperatives is a multi-million dollar venture, compared to all three of the Evergreen Cooperatives startups, according to a 2016 planning document released by the Democracy Collaborative. Additionally, the worker co-ops proposed in Rochester are planned to satisfy unmet consumer or anchor institution demands, instead of entering markets already served by existing vendors. Fitts believes this will minimize risk, as well as prevent duplication and competition within the local supply chain.

Second, the anchor approach in Rochester is conceived to build alliances with independently-forming worker cooperatives or conversions as a way of accelerating growth in the cooperative sector. Rochester’s planned nonprofit umbrella corporation — the equivalent of the Evergreen Cooperatives Corporation — plans to offer business services and back office support to other cooperatives. Potentially, this will facilitate profit pooling across a wider universe of co-ops that can be used to finance additional worker co-op starts. Speedy growth in the number and size of anchor-linked worker cooperatives is the best way to benefit worker co-op members, while also lighting a spark in the divested communities where they locate. The concept in Rochester builds a new avenue for growth into the approach.

The Ecosystem Approach in Motion in Madison and Richmond, California

New York’s effort to promote worker cooperative development happened by a collaborative of nonprofit co-op developers that provide technical assistance. As more cities have emulated New York, the ecosystem approach has shaped up, as cities think about the DAWI-inspired ecosystem concept in the context of the particular resources, strengths, and challenges in their cities. In New York, the collaborative of co-op developers organized itself, but this has not been the experience in every city. How to activate a community of worker co-ops or co-op developers is a challenge to overcome in certain places, and trajectories in two cities lead to different answers.

Richmond, California had a difficult experience getting worker cooperatives established through an education-focused program it funded for one year in 2011/12, finding that cooperative entrepreneurs needed more business and social supports than were available. Learning from those challenges, City Councilperson Gayle McLaughlin is helping the nonprofit Richmond Worker Cooperative Revolving Loan Fund, spun off from her time as Mayor, establish a worker cooperative incubator. The planning is funded by the California Endowment and, if established, will provide heavier business supports than the initial City of Richmond endeavor. Incubators have not figured prominently in municipal understandings of how to promote worker cooperatives, but it may be useful in areas like Richmond without much local worker cooperative experience arising organically.

The path forward in Madison is different. Madison enjoys a comparatively rich cooperative history and business culture, but worker co-op development organizations did not join together to lobby for municipal funding as they did in New York. Instead, the Mayor initiated the plan to fund cooperative development through personal interest and more casual interactions with some of the city’s cooperatives. In the absence of a co-op developer collaborative like New York’s, the City of Madison is setting out to organize one itself. After approving budget allocations of $600,000 for each of the next five years, Madison has been encouraging a variety of existing local cooperatives, organizations, and lending institutions to come together to discuss how they can proceed in setting up worker co-op development capacity as well as loan funds.

The city is convening the local organizations, cooperatives, and lenders to decide together how best to divide responsibilities and, said Madison’s Ruth Rohlich in an interview, the group “may have to create new organizations to manage the program as opposed to just adding it to already existing programming.” While the participants have leeway in imagining how they can best make use of Madison’s investment in worker cooperatives, the city government has used its Request for Proposal to place some parameters on the planning process. For instance, Madison expects any organizations contracted for this initiative to work with University of Wisconsin’s Center for Cooperatives (a university-based research center), Shared Capital Cooperative (a cooperative lender), and to include labor unions in planning and implementation processes. Like New York, it will also require reporting so that the city can help troubleshoot if necessary.

Another element introduced in Madison is to make finance capacity an explicit focus for ecosystem building. Madison is devoting half of the funding allocated, or $300,000 per year for five years, for the development of a worker cooperative loan fund. The City of Madison expects whatever fund managers it contracts to be capable of growing the loan fund beyond the city’s contribution, mainly through fundraising plans, matching dollar requirements, or getting financial institutions to set aside percentages of loan capital.

Berkeley and Oakland Join the Wave with a Third Approach to Worker Co-op Development

A third approach aimed at incentivizing worker cooperatives through preference bidding is taking shape in Oakland and Berkeley in consultation with the Sustainable Economies Law Center. Both cities passed resolutions to establish bidding preferences earlier in 2016 for implementation in the coming months or year. Oakland just sent a follow-up ordinance for City Council consideration in October 2016.

While the details are still being worked out for eventual implementation, the resolutions or planned ordinances in Berkeley and Oakland involve worker co-op certification protocols intended to make sure preferences go to truly worker-owned and managed businesses; informational materials to be displayed by the city to incentivize worker co-op starts; and discounts or points for worker cooperatives competing for city bids. Additionally, Berkeley’s ordinance includes some tax and registration exemptions or reductions, as well as expedited land use review.

As preference bidding proceeds, city governments are likely to adjust their approaches. Said Oakland Councilperson Annie Campbell Washington in an interview, “There will be a limited number of worker cooperatives right now who will be able to take advantage of (bidding preferences).” Getting worker co-ops to form in the areas of city purchasing and contracting may prove to be the main puzzle to be solved in growing the worker co-op sector through bid preferences and, ultimately, a focus for experimentation as the approach unfolds over time.

Making Worker Cooperatives a Permanent Urban Economic Development Focus?

In her book The Entrepreneurial State: Debunking Public Vs. Private Sector Myths, Mariana Mazzucato made the case that government spending is often implicated in cases of transformative innovation, such as that motivating the advocates of worker cooperatives as engines of market change. The spreading municipal commitment to worker cooperatives is notable, not only for the resources city governments bring but also for the connections they can make between worker cooperatives and business, financial, and nonprofit communities as well as other scales of government. Institutionalization or making the city commitment long term or permanent could help produce the sort of sustained attention, effort, and patience needed to scale-up worker co-op sectors.

At this time, the ten city governments have not taken steps to make support of worker cooperatives routine. Rochester’s Fitts expressed in the report a sentiment common among the cities. In Rochester, ongoing municipal commitment will depend on showing, he said, “that this is a feasible and effective method of capturing some of the economic energy, that it can be replicated, and that it can continue to grow businesses of this kind.” New York City has decided to fund year by year, although it could decide to make multi-year commitments in the future.

Worker cooperatives may have additional ideas for measuring and enhancing performance of these municipal cooperative development efforts, as well as deciding collaboratively how city governments can improve their support. But, assuming worker cooperatives perform as desired, city governments cited additional challenges to asses before deciding whether or how worker cooperatives will fit into their economic development plans. First is duplication or displacement of existing small businesses. Oakland’s Campbell Washington relayed a sense that city officials like herself are to “advocate for local independent businesses at the same time I am advocating for worker cooperatives.” Displacement of existing local businesses and the jobs they support are risks in all types of economic development, but innovative cities want to see net growth of opportunity, especially for people at the bottom of the wage hierarchy. Advocates of worker cooperatives can allay some of this challenge by focusing on growing or emerging market sectors when possible, or in areas of unmet demand.

A second challenge to routinizing city commitments to worker development concerns resources. City governments cannot always count on slack budgets and reported needing to make hard choices at times between competing projects. Cities have been important allies to worker cooperatives, but the federal government role could be bolstered, helping cities access an adequate resource base from which to co-create innovations with community.

Finally, some cities are curious to see how well worker cooperatives balance social and business purposes. There is possible tension between getting to social inclusion and remaining competitive in the market, noted Minneapolis’ Daniel Bonilla. Cities want to see outcomes in both areas and, if both can be accommodated, worker cooperatives may become more permanent features of city economic or small business development planning.

[Editor’s note: attempts were made by the author to elicit feedback on the various policies discussed in this article from co-op worker-owners, but none have so far responded.  However, as our mission at GEO is to amplify the voices of worker-owners specifically, we are asking again for feedback from practicioners on these municipal policies. It would be especially helpful to hear from worker-owners in the cities discused about their experience of the programs so far.  We encourage everyone, but especially worker-owners, to respond in the comments section.]

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The post How Urban Governments Are Promoting Worker Co-ops appeared first on P2P Foundation.

Certain changes to the cooperative form could permit the creation of enterprises that would not belong to anyone specifically but would be at the disposal of its users, workers and clients alike

We have argued in the past few years for a new form of ‘open cooperativism’ in which cooperatives would engage themselves structurally and legally to the production of common goods (the common good, the commons), i.e. not just work for their own members in a form of ‘collective capitalism’. The following article is a very good explanation of the differences, tensions and potential convergences of common and cooperative forms of ownership

By BENOÎT BORRITS: “Company buy-outs and transformation into cooperative enterprises are often presented as a step in the construction of commons, as the various stakeholders – workers and users – are involved in the process of preserving and developing a resource. However, even though the cooperative form departs from the traditional rules of capital, it still remains essentially private in nature, which leads to frequent capitalist drifts when the cooperative is successful. What changes to the cooperative form would permit a better construction of the commons?

While realising the construction of commons is a co-activity between a number of stakeholders managing a resource²⁵, cooperative ownership remains private in nature. Not all stakeholders can be represented in a cooperative and similarly, every person who participates in the life of the cooperative is not necessarily a member of it, as applications can sometimes be rejected. Likewise, to become a member of a cooperative a share must be bought, an investment made, albeit often minimal²⁶, and this constitutes ownership. In addition, cooperative shares cannot be freely transferred; they are generally bought back by the cooperative itself²⁷. Although all these elements are obvious deviations from traditional private ownership of a capitalist nature, it is still true that cooperative shares do belong to a clearly defined natural or legal person.

The third principle of the cooperative²⁸ is that the company’s reserves cannot be disbursed. When a company makes a profit that is not distributed as salaries or dividends, it is accounted for as reserves which increase the value of the company’s equity²⁹. In the classic regime of a capital company, shareholders have a right to the equity commensurate with their holdings. This means that the sales price of a share always includes this portion of the reserves. In cooperative law, due to the limited remuneration of the contributions, the profits made cannot be distributed to members and therefore become indivisible, which means that they belong exclusively to the cooperative and not to its members. This is why transactions are always done at the nominal value of the share. Do these indivisible reserves presage the construction of a common? This is far from certain.

Reserves build up as soon as the company turns a profit. In the competitive environment of today’s economies, these reserves, like the price of members’ shares, are a force driving the development of the company. Just like any capitalist shareholder, cooperative members do not want to see their shares depreciate. Nor do they want to divest themselves of reserves, once built up, as they represent both a security net for their shares and a way of developing the cooperative further. When a cooperative grows economically, it can often be observed that the cooperative spirit that powered the organisation at the beginning gives way to typically capitalist behaviour. One of the most obvious examples of this is the cooperative group Mondragón.

At the peak of its growth, the group was made up of 125 cooperatives linked through second level cooperatives and the governing body elected by a group assembly made up of representatives of the various cooperatives. Mainly comprising industrial cooperatives, the group had to face the issue of globalisation after Spain joined the European Union in 1996. To do so it introduced a policy of acquiring foreign companies which remained subsidiaries of Mondragón cooperatives and were not turned into new cooperatives. The workers of these subsidiaries kept the status of employees, reporting to the company management and did not become members like their counterparts in Spain. So the question is, why didn’t these employees become members? A number of different explanations have been mooted (legal difficulties, membership reserved to the Basque Country, etc.) which remain unconvincing. There is, however, another reason which is far more prosaic.

At the end of 2012, the group’s equity amounted to €3.95 billion, composed of 2.05 billion of shares and 1.9 of billion indivisible reserves. Unlike French workers’ cooperatives (SCOPs), the shares in Mondragón cooperatives are revalued. One might think that this fact would facilitate the entry of new members as they join the cooperatives on the basis of a share that is revalued every year. But it is not a full revaluation, as we can see from the existence of indivisible reserves which almost equal the number of shares. Even if these indivisible reserves do not belong to Mondragón members individually, they do represent a safety net for them and the potential for investment and development. So it is easy to understand that they are attached to them and want to keep them. From a strictly financial point of view, a new member of a Mondragón cooperative benefits from a discount of approximately 50% to access the group’s equity simply due to the build-up of these reserves. There is no doubt that current members are happy to introduce new people in the general and every day running of the cooperative, but doing so on a large scale and integrating employees of the subsidiaries bought is another problem entirely.

In other words, although the indivisible reserves are indisputably collective property, it is still private from the point of view of people outside of the cooperative. The reserves are indivisible due to the third pillar of cooperatives: limited remuneration of the capital. This does not resolve the issue of ownership linked to the existence of equity. A new approach could be tested, that of an equity-free company that is financed by debt alone. This would be an unprecedented political revolution that would pursue the idea of creating common property: power would no longer be defined in terms of holding company shares, but one’s place in relation to the production unit. Co-activity would grant the power to decide. Workers would manage production and users would be able to have their say on the direction and quality of production. But is this credible? Is equity really avoidable?

The world of finance justifies the existence of equity by stating that lenders need to see that owners have more to lose than lenders do: a loan entails a commitment to repay, regardless of how the company performs financially. It is, however, the shareholders who suffer first from a fall in activity or shrinking margin, provided that the capital is significant and the shareholders have something to lose. This is why financiers always check the amount of equity in the company before granting any credit to a capital company, often of the opinion that a ratio of one to one is reasonable. In the world of workers’ cooperatives, however, we can see that the approaches are much more aggressive.

We can refer here to the example of the Ceralep SCOP, based in Saint Vallier in the French department of Drôme. A manufacturer of very high tension electrical insulators, this company was liquidated in 2004 by its owner, an American group. The employees put together a plan to turn the company into a cooperative in order to save jobs. Funding of €900,000 was needed. All the banks, with the exception of Crédit coopératif, refused to finance the project. The cooperative movement – risk capital organisms from the SCOP movement and the Crédit coopératif – put up €800,000 in loans and quasi equity funding (shares). The employees were asked to contribute €100,000 which they did not have. In the end, they contributed €51,000 and the rest came from subscriptions from locals in support of employment. This enterprise has just celebrated its 10 year anniversary, during which the enterprise has increased salaries while still taking on additional staff, all this with an initial contribution of just 5.67% of the necessary operating costs, a ratio which is absolutely unimaginable in classic finance.

More recently a tech company was turned into a SCOP by its employees: SET. The company, which belonged to a bankrupt Swiss start-up, had been put up for sale. An American-Singaporean group, K&S, put in a bid. The staff, fearing they were going to lose the technology they had developed over a number of years³⁰, wanted to put in a takeover bid. With only limited funds at their disposal (€160,000), they did not manage to find classic financial partners. Although they had not intended to turn the company into an SCOP, it was the cooperative movement that found the solution by issuing shares to build up equity so that the enterprise could borrow from the banks Crédit coopératif and CIC (a subsidiary of Crédit Mutuel). Out of a total €2 million, the staff only contributed 8% of this amount. After two years of being in business, the company is doing very well and continues to innovate and increase turnover.

These two examples – we could look at hundreds of others – show us that the cooperative movement and the world of finance have different approaches. It is not the equity that serves as a guarantee but the desire of workers to keep their jobs. In fact, if the legal form of the cooperative did not require members and therefore shares, cooperatives could work just as well without any financing from workers. If this can often be established (without claiming that this is always the case) can enterprise in practice work with debt as the only method of funding?

Debt financing means that workers are not doing any self-financing³¹ and that they therefore get the full market value for whatever they produce³². At a first glance this looks tricky as equity is subject to discussion and applying different accounting standards results in different equity evaluations. The difficulty is evaluating the shares³³. But rather than trying to give them a value, shouldn’t we accept that all assets, whether tangible or intangible, must be financed? This is already the case for long-term tangible investments. A company that wants to invest in a piece of equipment that will be used for 20 years would, for example, finance the purchase by means of a bank loan for the same length of time³⁴. The same should be done for any intangible asset such as research and development or a publicity campaign. A research and development programme must first be quantified and would be funded on a risk capital basis with variable rates depending on the business outcomes of the research. Similarly, a marketing campaign must be funded in advance for the period of time over which the company hopes to see results, probably with a repayment schedule that would quickly repay the bulk of the campaign then with smaller repayments corresponding to the staggered publicity achieved during the campaign. Finally, a large part of assets rely on short-term elements such as stocks, client receivables less short-term debts. This is a classic assessment of the running costs requirement. The idea is therefore that banks give companies lines of credit commensurate with this running costs requirement, which will be continuously re-evaluated based on each accounting statement.

Debt financing social enterprises is therefore technically possible. It would allow the creation of enterprises without equity that would not belong to anyone specifically but would be at the disposal of its users, workers and clients alike. Under this format, and unlike cooperatives that only differ from the capitalist way of thinking partly, the entity would not accumulate profits for itself. This means that workers would be remunerated at the exact market value of their work, perhaps enhanced or adjusted by subsidies or deductions. This presupposes the existence of a banking and financial services sector that would permit collective ownership of manufacturing means at different levels and represent the commons at higher levels in the company. In this context, investment decisions would be taken jointly by the company’s workers and users and a socialised credit agency that would agree to a funding proposal, thereby heralding an instance of commons held by them with a view to creating a federation of commons.”

Notes:

• ²⁵ Commun, Essai sur la révolution au XXe siècle, [Commons, an essay on the revolution of the 20th century] Pierre Dardot and Christian Laval, Editions La Découverte, 2014
• ²⁶ Which is not always the case of workers’ cooperative, in particular those in the Mondragón group in Spain.
• ²⁷ This is why they are variable capital companies.
• ²⁸ http://www.entreprises.coop/7-principes-cooperatifs/85-decouvrir-les-cooperatives/quest-ce-quune-cooperative/166.html
• ²⁹ Reserves are defined, among other things, as being the difference between the assets and liabilities.
• ³⁰ The SET was set up in 1975. It was then bought out by a German electronics group and then by the Swedish start-up which saw the technology developed by SET as an asset to its own expansion.
• ³¹ Which would lead to the creation of equity.
• ³² By disregarding the regulatory mechanisms of redistribution of the wealth produced such as social security contributions.
• ³³ Although debts are relatively easy to quantify, as they are sums of money that must be repaid, the lack of certainty in relation to evaluating equity is due to the assets, as the liabilities are always equal to the assets.
• ³⁴ Or sometimes leasing. In this case, the equipment does not even belong to the company and is not listed as an asset.

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As the familiar features of consumer society recede, new institutionalized forms of cooperativism can help to ease some of the disruption and foreseeable hardship.

This is the first of a series of posts on post-consumerism. It was authored by Maurie J. Cohen and originally published at TruthOut:

By famously implementing the $5 per day wage in 1914, Henry Ford was the first industrialist to recognize that a consumer society can only function when workers have access to ample income to finance discretionary purchases. During the 1930s, under the tutelage of John Maynard Keynes, this understanding became a key tenet of macroeconomic policy in many parts of the world. However, by the 1970s, high inflation, obstinate unemployment and other sources of economic instability called this strategy into question and unleashed during the following decades a wave of neoliberal reforms.

Ensuing years brought forth a protracted period of stagnating wages and increasing income inequality, and consumer society was perpetuated, as is today widely recognized, by deregulation of the banking sector and a deluge of easily available credit. The financial crisis of 2007-2008 and subsequent Great Recession exposed the fallacies of such policies, and uncertainty has resurfaced about the durability of consumerism as an economic engine.

Consumer society as a system of social organization appears to be in jeopardy on a number of fronts. First, populations across North America, Europe and most of Asia are ageing, and demographic change is shifting preferences away from lifestyles premised on material accumulation. In addition, millennials continue to face extremely precarious job prospects. The resultant consequence of these dual trends is evident in faltering rates of home ownership and declining levels of personal automobile use in a number of countries.

Second, rising income inequality is fracturing the middle class that has for more than half a century been the flywheel of consumer society and solidifying a two-tier, hourglass-shaped social structure.

Third, private consumption is dependent on complementary public procurement, and austerity policies over the past decade are emblematic of declining political wherewithal to make requisite investments to renew the social and physical infrastructure on which consumer society relies.

Finally, and perhaps most significantly, consumerist lifestyles have long been predicated on waged employment and the willingness of workers to spend relatively reliable income streams on goods and services. Steady work that compensates employees on a salaried or hourly basis and provides modest benefits are disappearing, and less regularized, contingent work is becoming commonplace. Some analysts have disingenuously characterized the proliferation of Uber-type jobs as “sharing,” when this trend actually demonstrates how workers are finding it increasingly necessary to string together freelance assignments to make ends meet.

At the same time that we are beginning to transition away from consumer society, a new wave of digital technologies premised on artificial intelligence is set to unsettle a large number of economic sectors — from health care to engineering. One upshot of this disruption will be that short-term tasks will become an entirely normal feature of the employment landscape.

In response to these developments, several governments have begun to evince interest in providing workers with a non-labor source of income. These proposals come in several varieties and include a universal basic income (UBI), a citizen’s dividend and broad-based stock ownership in corporations. Particularly notable is Finland’s recently announced program to test the viability of a UBI scheme that will pay all eligible recipients approximately €800 per month. Other countries are actively debating similar initiatives.

Unfortunately, extreme political fractiousness in the United States and Europe makes it improbable that these ideas will promptly receive wider legislative endorsement. In the meantime, what are struggling households to do as theorganizational pillars of consumer society collapse and the most readily apparent alternative resembles a 21st century version of feudalism?

We seem to be at a juncture where we need to rediscover the lessons of mutual assistance. One option entails building on novel modes of cooperativism that meld production and consumption into a single organization.

The largest worker-consumer cooperative in the world is the 800-store Eroski supermarket chain, a subsidiary of the venerable Mondragón cooperative headquartered in the Basque region of Spain. Smaller prototypes thrive in the United States in the form of the Weaver Street Market in North Carolina and the Black Star Co-op Pub and Brewery in Texas. There are also indications that the reticence that has traditionally marked the relationship between cooperatives and trade unions is giving way to a new spirit of collaboration supportive of this general idea.

History suggests that economic transitions are extremely painful and chaotic. This was the case as agrarian society gave way to industrial society during the second half of the 18th century. Similar forms of dislocation were widespread as the service economy in turn displaced manufacturing two centuries later. Even as this latter transformation is still playing out, a new era of expansive socio-technical change is starting to unfold. As the familiar features of consumer society recede, new institutionalized forms of cooperativism can help to ease some of the disruption and foreseeable hardship.

Maurie J. Cohen

Maurie J. Cohen is Professor and Director of the Program in Science, Technology, and Society at the New Jersey Institute of Technology and author of the forthcoming book The Future of Consumer Society: Prospects for Sustainability in the New Economy (Oxford University Press).

Photo by Community Photography ‘now & then’

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Buying from cooperatives is one of the smartest and easiest methods which all of us can use to transform our economy today. It brings real change, in the best and fastest manner possible. Moreover, buying from cooperatives have massive advantages for your purse and your own life standards.

It sounds too ‘magical’ to be true, right.

That’s because it actually is – both true, and magical.

Let’s see what kind of thing these cooperatives are, and then demonstrate how they transform the economy and society.

What Cooperatives are and how they work

Cooperatives are worker-owned enterprises. They provide products and services just like any company, however they are owned in equal shares by their owners. Moreover, they are democratically controlled.

Worker-owners vote to elect representatives among themselves to managerial positions. These managers than take decisions according to the policies the Worker-owners set. Decisions are taken through direct democracy as much as possible, however managers are needed for things like day to day operations, which you can’t reasonably put to vote every other day. So, a cooperative is a very participatory and engaging workplace. Worker-owners not only own the firm, but also run the firm together.

So, when you buy from a cooperative, you give your money not to a massive Wall Street corporation with nameless, billionaire investors who have nothing to do with working to bring you your product, but to people who actually worked to make that product possible.

Great stuff.

Its a people to people transaction. Like buying your grocery directly from the farmer. Except, you can get all kinds of products and services from cooperatives because cooperatives are quite proliferated. There are cooperatives which render financial services, there are cooperatives which render industry byproducts, there are those which produce consumer items like electronics.

So what effect do Cooperatives have in the society and economy

Foremost is democratization of Economy and Politics

A cooperative is worker-owned. Which means that if a cooperative gets bigger due to your business and it needs to hire more workers, the new workers join the cooperative as worker-owners.

The bigger the cooperative and more workers it has, the more worker-owners it has to take on.

So, a cooperative which has 3000 workers is an institution that is run democratically by 3000 people who actually work in the cooperative. And the profits are shared among these people.

This is totally the opposite of a corporation which would have 3000 workers, but a few tiny majority shareholders would share the profits from whatever the company produces.

Therefore, as bigger swaths of the economy are run by cooperatives which employ millions of workers, millions of people take decisions which impact the economy instead of few majority shareholders of a few mega corporations.

This has two immediate beneficial effects:

• Causes the economy to be run in a more democratic fashion and delegates the decision making to people
• Prevents the concentration of wealth, therefore economic power, in the hands of a tiny wealthy elite
• Which in turn, prevents concentration of political power in the hands of the same tiny wealthy elite

As you probably know wealth is easily translated to political power through many mechanisms that allow massive wealth to influence politics and elections. Therefore democratization of the economy and widespread and egalitarian distribution of the profits prevents concentration of both political power and economic power in the hands of a privileged minority.

Another benefit is greater participation of people in economy and politics

If people have power to run their own economic affairs and impact the economy, they are more inclined to take action regarding issues in their society. It goes without saying that people who are used to thinking and making decisions in their workplace every day and taking ownership and responsibility of issues, will naturally carry that behavior to life outside their workplace.

People become active and participate in their society instead of remaining passive as a habit. They are more inclined to take part in their neighborhood associations, community organizations, charities, NGOs and even political activism.

This is coupled by the ever-present constant education cooperatives give their worker-owners, providing a healthy, active and educated public.

Win-win, in both cases.

Environment also benefits!

Cooperatives are run by people. People like you.

These people do not put their personal profit ahead of the safety of their own children or their neighborhood. They can’t. Worker-owners in a local cooperative which produces dairy products cannot even imagine selling conspicuous dairy products.

The ones buying those products would be their children’s friends, their own friends, their neighbors, their relatives!

This is a much stronger incentive beyond reputation of the cooperative – it is a direct concern to set and keep standards high.

Even better, this culture of high standards and social concerns becomes permanent – even if the cooperative grows big, it tends to keep the cultural traits it picked up during its inception phase.

Not surprisingly, the worker-owners of the biggest cooperative in the world, Mondragon Cooperative, had voted to produce only products which had actual meaning and made an impact in the lives of the people a few years ago. Mondragon is a massive organization which has 80,000+ workers in hundreds of cooperatives which are active in 30+ countries around the world!

You also directly benefit

When you are buying from a cooperative, you not only buy higher quality products produced with more concern than an ordinary corporation in return for your money. You also put your money into circulation in your local economy.

The worker-owners of a cooperative active in your area are your neighbors, your fellow city folk. When you do business with a cooperative, your money is distributed among these people. These people then take the money they earned from you, and spend it in your locale, further stimulating the economy.

Your money does not go into the balance sheet of a a major mega corporation or its rich shareholders and then gets hoarded in an investment fund that prefers to make money through financial machinations than actually investing the money back into physical products or services. So it escapes what is called ‘financialization of the economy’.

Therefore doing business with a local cooperative self-reinforcing feedback loop that keeps the money in local economy. It benefits the worker-owners, your locale, your neighbors and you.

How about working in a cooperative

Remember how as you do more business with cooperatives, they get bigger?

That’s another benefit – a growing cooperative will need new worker-owners, so, why shouldn’t you join a cooperative in your area and become a worker-owner yourself?

What could be better than working in a place in which you have an actual share and say? How about getting a fair share of the profits in return for your work?

Sounds great, isn’t it.

It is great. Nothing beats having a say in your job, your economic life, and your society.

“Im’ sold. How can i find cooperatives in my country/locale”

There are many cooperative registries which can easily be accessed through internet. All you need to do is to search for cooperatives in your area by searching for proper keywords. Like “your locale” + “cooperative”. Or, “cooperatives in” + “my area”. Which bring many results.

For example here is a list of cooperatives in United States.

And, a broader list of cooperatives in many countries here.

Asking around in your community/locale is also a great idea. People will know.

Once you identify a cooperative in your area, learn the product brands they sell. And when buying anything, try to look for one of their products in that category first, only consider non-cooperative products if you aren’t able to find the product in your local store or market.

Moving your money to credit unions instead of major banks is also a good idea. There are cooperative banks like National Cooperative Bank (US) as well.

Online forums, communities regarding cooperatives also make finding and working with cooperatives quite easy. You can find these through internet and join and participate for free.

How’s that for rapid, easy and win-win change?

See, in just one go, you can not only easily push rapid transformation of society and economy in your locale, but also enjoy great benefits for your own life and finances as well.

Get a great start to your day tomorrow by searching for cooperatives in your area and planning how to carry over your business and your daily purchases to them!

For your benefit, for the society, and for the future.

Licensed under a creative commons attribution-share-alike 4.0 international license. (CC-BY-SA 4.0)

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Labor as a false commodity in the financial crisis

The third of Polanyi’s false commodities, labor, is a special case. Without unionization or government intervention, labor is generally at a disadvantage to the owners of business, except in the case of highly skilled labor, as labor is normally overabundant, and easily reproducible by a very enjoyable process. In Polanyi’s words, “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation (Polanyi, p. 73). As a factor of production, it is in the interest of business to minimize wages to labor. As consumers, laborers benefit from low prices resulting from reduced labor costs, which act directly against their interests as employees seeking higher wages.

There are several specific results of labor as a market commodity. During bust cycles, labor is hit with unemployment, leading to many of the social consequences pointed out by Polanyi. Due to globalization, labor has not been compensated for its increased productivity contribution since 1975 in the US. Also, as a result of treating labor as a market commodity, Polanyi predicted starvation and crime would result, without social intervention. We can evaluate these results in light of the 2008 financial crisis.

…

Since 1975 workers have received almost none of the gains of increased productivity, which has increased by 143% since around 1975 (figure 14). In other words, productivity has more than doubled, while workers received none of the gains. This can be explained by the deindustrialization of the US economy, as heavy industries followed by manufacturing in general were exported to Asia. Due to this trend there was a huge decrease in unionization which went from 39% in 1940 to around 10% in 2014. During the same period there was a trend toward part-time work and contract labor, mergers and acquisitions, with downsizing and layoffs. The Reagan revolution and Republican “Contract with America” both served to remove power from the working class and transfer it to corporations. One of Reagan’s first acts as President was to break the Pilots and Air Traffic Controllers strike (PATCO), replacing them all with military personnel. That was the final nail in the union coffin. The Democratic Party in 1992 through the Democratic Leadership Conference chose to seek the same corporate and Wall St. money as the Republicans, and from that point on effectively stopped serving the working class. All these factors led to the reduction of bargaining power and political power on the part of labor, and can help explain the stagnating real wages during this period of time.

Solutions to commodity labor

One of the responses to critiques such as Polanyi’s of labor as a market commodity was Marx’s prescription of a “dictatorship of the proletariat”, and state ownership of the “means of production”. It turns out that one dictatorship is no better than another. Also owning the means of production does not necessarily eliminate land or money as commodities, although presumably putting labor in charge of managing industrial production would give them more sovereignty over their work lives. In reality during Soviet communism, laborers remained commodities ruled by party elites. More recently the Mondragon cooperatives have demonstrated a more cooperative form of labor management, still within the market system, but with good results. In the US Louis Kelso originated the idea of Employee Stock Ownership Plans (ESOPs), which would ideally turn all employees into capitalists by giving them a share of stock in the company. This has had limited success. Many ideas for returning power to workers have been proposed in recent years. Community land trusts often employ development and construction companies for housing construction and renovation. Therefore, combining community land trusts with worker-owned construction companies is feasible. Gar Alperovitz has promoted many structural reforms including, “the traditional radical principle that the ownership of capital should be subject to democratic control” (Alperovitz, 2013). This refers to worker ownership or participation in their own workplaces, a very different proposition than state communism or state capitalism. Democratizing the workplace is a great unfinished business of society.

What few reformers have advocated directly is to remove labor as a factor of production sold in labor markets. It is probably a lack of imagination that prevents us from imagining an economy where labor consists of human beings doing meaningful work in alignment with their skills and interests. Aboriginal and tribal people managed to do it, through non-simultaneous reciprocity. Even in feudal times according to Polanyi, labor was tied to feudal estates and was remunerated according to social relationships, not according to labor markets. Surely we can find an approach embodying something like Sen’s capabilities approach that respects the humanity of labor, while still remunerating them for their work. We need to find a way for laborers to gain control of their lives and work according to their capabilities, instead of simply selling their labor in markets.”

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