Platform Cooperativism

Platform cooperativism instead of banking

Image from CommonGood.earth

I’ve mentioned the book Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet in my last two blog posts. I’ll recommend it again as a resource for understanding platform co-ops and as a source of inspiration. It is cleverly edited with essays from many experts and includes profiles of platforms that serve the cooperative good.

One such platform profiled is located near me, here in Massachusetts. It is an alternative banking system called rCredits that has spread from Massachusetts to Wisconsin. rCredits create a vehicle for pooling US dollars with the ultimate goal of community development. Although not a co-op, rCredits are based on a software platform supporting a democratic process.

rCredits were started by Common Good Finance (soon to become CommonGood.earth) in Ashfield, MA. Successful rCredit communities have been set up in Greenfield, MA (2013), and Ann Harbor, MI (2015). And currently projects are in various stages of incubation around the country.

rCredits (soon to change their name to Common Good Credits) are exchanged for US dollars. The US dollars are then kept in reserve as the credits are used as currency in a community. That community then governs the use of the pooled capital taking the role of a bank. rCredits can be exchanged back to US dollars at any time. As rCredits are moved around among people, the US dollar “escrow” grows with more users. Then the community can decide what to do with this reserve of capital by investing it or making loans, ideally, community focused.

According to the website, in the short term it is a payment system building toward a higher goal: community-oriented projects and community improvement. “The purpose of the rCredits system is to create and fund community-centered participatory democracy.”

True to platform co-op form, this technical platform facilitates democratic participation providing transparency of transactions. “rCredits are a way to keep track of who has how much and who’s paying whom, using our own bookkeeping system instead of the international banking system.” Common Good Finance serves a support function for communities as a non-profit 501(c)(3). See a YouTube video that describes the software element. (Drupal developers may be interested in the relevant Drupal module.)

As with co-ops, governance brings responsibility. “As rCredits members, we are all responsible for overseeing the system. That means we have to understand it and keep an eye on it. Economic justice demands broad participation and local control.” It also involves engaged voting, and in-person meetings to make decisions. Those involved in co-ops won’t be surprised. Additional benefits and responsibilities are described on the website as: “Common Good Democracy combines: liquid democracy, Condorcet, instant runoff, approval voting, internet voting, town meeting-style discussions and a spirit of consensus.”

On the whole this may seem like a complex solution vis-a-vis convenience of traditional banking. A common cause for a community can be a blessing but hard work. Conversely, convenience can be a trap. In this case a convenient traditional bank benefiting from a community’s deposits. My previous blog post challenging Google Docs describes the same principle of exploiting pooled capital in the form of data. rCredits are a solution but it means doing the hard work of working together.

Cooperative Imagination

A graphic showing the top 300 international co-ops from “Exploring the Co-operative Economy” by ICA and Euricse.

I’m writing about imagination because I need to. The co-op movement needs it. To consider the ideal instead of the worst. Imagining the worst possible scenarios breeds propaganda, invoking fear and threats to safety, that keep us from working together cooperatively.

We need to envision a better world. It can be difficult to do with propaganda and the distraction of what Chris Hedges defines as spectacle. We’re lucky to have important intellectuals like Noam Chomsky and Chris Hedges analyze our present reality, but they paint a bleak picture. Therefore, we need to first be informed on realities then consider growth, prosperity, progressive economics, and cooperative solutions. Cooperative solutions are in the past and present. Collective action is part of American history and can capture the imagination – imagination that is being fought for. It was modern propaganda, created on a mass scale for World War One, led by George Creel, that changed progressive politics and how Americans think. See Chris Hedge’s book Death of the Liberal Class.

We owe a lot to those that have maintained imagination for co-ops. Nathan Schneider and Trebor Scholz are editors of Ours to Hack and Own, and creators of platform cooperativism. They’re tenaciously imagining new forms of ownership. A review of the book and the movement is nicely summarized by Makery.info. With a vision, we start to think of how.

Thanks to Nathan Schneider, we’re considering specifics on how to build a better web. Twitter could be owned like the Green Bay Packers; maybe too ambitious, but it’s visionary. And it has evolved into more thinking on the topic. The latest news on #BuyTwitter is described on Shareable.net covering innovative thinking from Nathan Schneider, Trebor Scholz, Douglas Rushkoff, Chris Cook, David Hammer, and Rachael Lamkin.

So, first, don’t be lazy about your news sources. This will affect your ability to imagine what is needed for our cooperative future. Ironically, I think you need to read the worst case scenarios on news sites such as CounterPunch.org (which wrote about co-ops this month), but then picture a good future. Truthdig.com is another alternative news source. Then, second, don’t forget to read YesMagazine.org, and Shareable.net.

Co-ops are a bigger part of society than people realize. The 2016 report “Exploring the Cooperative Economy” by the ICA and Euricse reports $2.5 trillion in annual revenue earned by the world’s top 300 co-ops. Co-ops can solve social, economic, and sustainability issues. We need the power of the collective action in the coming years. Standing Rock is showing how it’s done. And we need a lot of imagination. Let’s create good news with co-ops.

My Web-App Revolution: A Platform Co-op

We all use Google web apps, part of Google Drive. How can you not? They are easy to use, collaborative, convenient, easy to access, and make file storage easy. Schools in my town can’t get enough of Google web apps for teaching. But here’s the thing: you use the app, but you don’t know where the information is stored and what is done with it. Next, you don’t have control over modifying the platform if you had the technical inclination to do so. And lastly, you don’t own any part of the software or the platform.

I’m looking for an alternative. Specifically for Google Docs and Google Sheets, their word processing and spreadsheet apps. My solution is to put two other existing web apps on a server. They are Etherpad and EtherCalc. Etherpad offers collaborative document editing. EtherCalc is a collaborative spreadsheet app. They are free and open source software (FOSS).

My two-app platform available for the potential hordes of web app users, or just say me for now, will provide the apps, hosting access, and ownership of the platform. Anyone who uses the platform, or develops it, can become a member and owner. This is platform cooperativism where “communal ownership and democratic governance” are the core tenets, as stated by Trebor Schulz in the new book he co-edited called Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet. These two aspects have evolved with co-ops through history. They’re now being advanced by platform cooperativism for the web.

Let’s say the idea grows and audiences come to the platform instead of Google Drive. If some kind of fee-for-service is instituted, patronage payments at the end of the year would get paid out to all members like other co-ops. Do we scale up and run rampant through the American educational system like Apple and Google? Members may also be asked to invest to raise capital. The direction it could take would depend on the owners/members/workers.

Governance of the members is always a challenge, legally and functionally. It’s different from projects that Yochai Benkler in Ours to Hack and Own calls peer production environments such as Wikipedia. Platform co-ops must develop a model that distributes democratic decision-making and ownership for a multi-stakeholder membership/ownership group. Janelle Orsi and David Carroll in Ours to Hack and Own advise careful legal preparation, as “novel legal frameworks” are required for platform co-ops. For group decision-making, a tool I have advocated for previously is Loomio. I also like their membership approach where a new membership can be free, but they encourage donations.

Using the software

My plan is based on software that someone else wrote, and this example shows, in a very basic way, why we must have free and open source software everywhere. Innovation needs collections of software, and the more we have access to, the more we can innovate new platforms for the internet. Software licensing is paramount for computer user freedom, giving access to software source code, and the ability to do with it what you like, advocated by the Free Software Foundation (FSF).

The license for Etherpad is Apache license 2.0. It’s a license the Free Software Foundation deems acceptable in terms of free software standards. “The Apache License 2.0 is the best non-copyleft license that does what a copyright license can to mitigate threats from software patents,” says FSF who holds all software licenses to the standards of the General Public License (GPL), or copyleft.

Ethercalc is also free software, with a license called CPAL. This license is less accommodating according to the FSF. CPAL is not compatible with GPL but still allows for the use of source code.

For now, I’m a one-man revolution with my web-app platform. If it remains that way, I can handle defeat. My previous revolution to make Google a worker-owned co-op has gone unfulfilled.

Software and Co-ops

Micky Metts presents on Platform Cooperativism

In early August members of the web development cooperative, Agaric, presented to two Boston area audiences on platform cooperativism. Platform cooperativism brings cooperation and collective control to platforms built for connecting people, services, and products. Ben Melançon from Agaric presented to the first audience, a group of web developers in Boston that meets regularly to discuss the content management system (CMS) Drupal. Drupal is widely used because it is powerful software, but it’s also free – free software is also known as open source software. The worker-owners at Agaric, particularly Micky Metts, have been working hard to bring together the movements of cooperatives and free software.

Ben’s presentation introduced platform cooperativism which offers something related to both cooperatives and free software: ownership. Distributed ownership of online platforms can benefit both developers and users in a cooperative structure that platform cooperativism champions.

Ben presented the possibility of funding a given web project by users. What if musicians, for example, invested in a music sharing platform that serves them? This would give the developers and the users of the platform a source of capital. Developers and users would also be owners forming a hybrid of stakeholders, creating a cooperative platform. Turning users into investors can be a powerful impetus for web development.

At a second event this month promoting free software called Libre Boston, the task of explaining platform cooperativism fell on the shoulders of Micky Metts and Chris Thompson from Agaric. Micky described the path toward platform cooperativism as a bridge. We can’t expect full investment in free software or platform cooperativism, but we can encourage incremental steps onto the bridge leading us toward platforms (and software source code) we can own. An integration of alternative software can liberate us from proprietary control. Switching to a Linux operating system from proprietary software is one example.

Chris emphasized the hybrid nature of platform cooperativism and drew attention to the hybrid Black Star Co-op in Austin. Although Black Star isn’t a cooperative platform, its innovative hybrid ownership structure bodes well for the multi-stakeholder ownership that platform cooperativism advocates.

The advent of platform cooperativism is fitting for the mission Agaric has been touting. An additional Drupal project was announced this month giving users a role in the development of online tools for organizations. It’s called Drutopia, announced by Chocolate Lily Web Projects. And in November, another platform cooperativism event is happening at The New School in New York.

Uber-contradiction

Sharing might not be sharing. A major rebuke of the sharing economy kicked off last November with Platform Cooperativism in New York. The event brought together thinkers and builders of a more cooperative internet and was described as taking back the internet by Co-operative News. Since then, a defining factor of whether you see the sharing economy as part of the problem or part of the solution, is whether you see Uber as part of the problem or part of the solution.

Uber embodies inequality according to Platform Cooperativism. Nathan Schneider, a co-organizer of the New York event, is quoted by Co-operative news: “Uber and Airbnb have brought our challenge into stark relief. On the one hand, they’re incredibly convenient and appealing tools that are in some ways tremendous advances on how things were before. However, they have made quite clear that they are not willing to be accountable to the communities in which they operate – to city governments, for one, and to the labour protections that workers have fought for for centuries.”

Others point to Uber as a successful example of the sharing economy. If you check #sharingeconomy on Twitter, you’ll see admiration for Uber with a tweet about Hertz joining forces with Uber. But in the same thread is a Shareable article from last November, comparing Uber to the Death Star.

And the Uber debate has now been taken up at the Stern School at New York University. Professor Arun Sundararajan has written a book questioning status quo sharing economy services. Called The Sharing Economy, Forbes magazine reports the new book has a chapter hypothesizing Uber becoming a co-op. I look forward to reviewing the book in a future blog post.

Beyond New York, Amsterdam is proactively addressing the sharing economy and recently put out an “action plan” for the city. But their plan is challenged by defining the sharing economy and considering equality. An article in Shareable wonders who the sharing economy benefits in the city’s planned initiative. The plan includes Uber as a sharing option: “improving the use of taxi cab capacity via the Uber app.”

Leaders of the November Platform Cooperative conference, Trebor Scholz and Nathan Schneider, continue advancing the conversation. Trebor was recently interviewed for a Shareable article (yes they really cover this stuff) about cities and Platform Cooperativism. Also see Nathan Schneider’s site internetofownership.net for a directory of online cooperative platforms and his great blog with news on technical co-ops.

Defining the Sharing Economy

Defining the sharing economy continues. An inspiring event took place at the Goethe Institut in New York, January 21st. In previous entries I wrote about Platform Cooperativism, that took place in November. This was a follow-up event with a gifted panel of experts questioning the current “sharing economy” and what it could be.

Artwork for Platform Cooperativism a movement developed by Trebor Scholz with events at The New School and Goethe-Institut, New York

Artwork for Platform Cooperativism a concept penned by Trebor Scholz including events at The New School and the Goethe-Institut, New York

Panelist Trebor Scholz who coined the term Platform Cooperativism has again convened thinkers and solutions that spread wealth and ownership to workers. Following the November event Trebor wrote an educational and inspiring report, Platform Cooperativism, published by the Rosa Luxemburg Foundation. It describes the reality of the “on-demand economy” we have today, often described as a sharing economy, where “companies like Amazon, CrowdSpring, and Taskrabbit” are creating more damage to society and workers than their supposed innovation. The result is “Platform capitalism” coined by Sasha Lobo and Martin Kenney. Scholz writes: “platform capitalism, so far, has been highly ineffective in addressing the needs of the commonwealth. What initially looked like innovation, eventually cranked up the volume on income inequality.” Uber and CrowdFlower are other examples.

The solution is building equality into alternate platforms that serve similar functions. Trebor wants to make clear that it’s being done. Blockchain technology was discussed at length in the November conference as one approach. Trebor writes: “Convincing tools based on blockchain technology have emerged over the past few years. Loomio, Backfeed, D-CENT, and Consensys.”

Other panelists at the Goethe-Instiut were Brendan Martin, Felix Weth, Chelsea Rustrum, and Emma Yorra.

Brendan Martin, founder of Working World gave some great perspective on what we’re confronting with ownership in today’s sharing conversation. Class warfare has repeated itself, and we are facing an age-old problem, he said. This puts discussions of ownership into perspective. Common grain storage in ancient times, for example, may have been stored for the common good, however, eventually ownership consolidates to fewer and fewer owners. Then the disadvantaged seek ownership again from the wealthy few, and the process repeats itself. This cyclical pattern reminds me of Saul Alinsky’s observation in his book Rules for Radicals where those that lack power may eventually get it, then conversely fight to keep it. This yin yang pattern in both ownership and power should be kept in mind.

Panelist Felix Weth is the founder of Fairmondo, mentioned in my last post. The German-based co-op is spreading into the UK. Hopefully there will be expansion into the US.

Chelsea Rustrum had a great message that sharing can actually be an advantage. She is a co-author of It’s a Sharable Life. In an earlier blog post I show that co-ops can outperform traditional capitalistic business models. Sharing of wealth at co-ops could exemplify this kind of advantage. At the Platform Cooperativism conference the term stigmergy was presented as a model studied by Joel Deitz and others. If groups have superior ways of coordinating then competitive advantage could result.

Panelist Emma Yorra has an impressive resume working with co-ops in New York and Working World in Nicuaruagua. She also mentioned collaboration with the oft mentioned financial co-op in platform cooperativism: Robin hood.

Sharing is a topic I believe all businesses should take seriously for practical reasons. I write this blog because co-ops share ownership, wealth, responsibility, and advantage. Cooperative platforms are no different.

Cooperative Economics

I think about economics a lot lately thanks to the Platform Cooperativism conference at the New School in New York. This is my second blog post about the cooperative topics discussed that ultimately address for me the all-important topic of wealth distribution. Prosperity can spread by borrowing the best qualities of today’s businesses and then structuring them democratically. Some innovative cooperative platforms already exist; capitalism can be modified as we can potentially teach corporations new and valuable forms of transaction; and government can help, too.

(more…)

CoopMatters.com

Innovation with Cooperation