Ownership Matters|Issue 12
Frank Talk about Co-ops; Schneider on Scaling; Surveillance Capitalism
- Editorial: A Frank Conversation
- Reflecting on Everything with Nathan Schneider
- New Lexicon: Surveillance Capitalism
- Rodney North and Why Worker Co-ops
- Co-ops and Child Care Case Study
- Recalling “Nun Money”
- Start.coop Refresh
- A correction
Not yet a subscriber? Sign up — it’s free.
A Frank Conversation with a Friend
I had an illuminating chat this week with a veteran co-op developer friend about the growing desire in this country for ownership and economic autonomy. At least I think it’s growing.
I referenced the new study from the University of Wisconsin’s Center for Cooperatives which reports that between 2011 and 2019, some 945 new cooperatives were incorporated in the U.S. — about three-quarters of them in urban counties and the remainder in rural ones. (These numbers do not include the number of co-ops in various stages of development, for which I’ve seen estimates of around 500 at any one time.)
“Is an average of about 120 new co-op formations annually going to change the system and overthrow capital supremacy?”
“I firmly doubt co-ops will ever just quietly replace the capitalist economy, business by business, over time. Ain’t gonna happen.”
“OK, I guess I would agree with that.”
“I know of a global foundation that spent the last three years exploring shared ownership (including co-ops) in the U.S. They simply could not find enough developed infrastructure to deploy the $10 million-plus checks they were willing to write.
So you know what will change the status quo? It will be the oncoming, multiple crises of climate, pandemic and their economic fallout that’s gonna goose the system hard.”
“That makes sense to me, I mean, we know that historically, co-ops and crises have always gone together.”
“We need to ask ourselves: do we believe in our own model? Doesn’t it seem clear that with co-ops and other forms of shared governance and equity we have a strategic advantage over the dying economy?
Can we not argue for the solidarity economy generally as a solution to this country’s terrible racial wealth gaps?”
“At this newsletter, we’re aware that actually lots of capital outside our ecosystems is trying to come in.”
“Yes, and sometimes on compromising terms for the integrity of the model. You take philanthropy and impact investing. The easy thing for them to do is to just cherry-pick the system for individual projects rather than fund the components for scaling. We need to know when to walk away from philanthropy — i.e., when it stops working for our programs.”
We at Ownership Matters are far from being the only observers thinking about these issues, of course. At this moment, new collaborative design processes involving several categories of stakeholders — philanthropy, impact investing, and entrepreneurs — are focused on 1) scaling what’s already working, and 2) beginning to showcase the abundance of innovation now underway in various organizations. This may be the most important news if you take the long view.
Nathan Schneider Reflects on Everything for Everyone (Part One)
Nathan is a professor of media studies at the University of Colorado at Boulder, where he directs the MEDLab, “a think tank for community ownership and governance in media organizations.” He is a co-founder of the Start.coop accelerator, a board member of Zebras Unite and also serves as an advisor to this newsletter.
Your latest book was Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy. It came out in 2018 — which feels like a very long time ago, as you would probably agree. We’re wondering what reflections you might have now, looking back on the book, and also looking forward.
Sure, happy to offer a few thoughts.
You know, what I’ve found over and over with books I’ve written is the way, once I’m done and looking back, then I start to realize what might have actually been the most important themes.
And one of those things that really came up for me is the nature of the generational divide. This deep sense of such a tremendous legacy in the cooperative movement, not just aspirationally but practically. Part of that was very personal for me, as I mention at the beginning of the book, learning about my own family history and how much my family’s life and progress was shaped by this movement.
Since then I’ve started working on building those connections. Writing the book, I was mostly focused on the new generation coming into the co-op movement. I had made some efforts to bridge that divide, and to put that older generation into contact with the new generation.
When the book came out, I organized a conference called the Colorado Shared Ownership Summit, trying to bring together big Colorado co-ops with smaller new ones. And it was really hard. I had to pull strings to get anyone from the credit union sector to come. And we had the president of the NCBA. And it was even the day that [co-op champion] Jared Polis was elected governor and did a video for us.
But still, it was very hard to get established co-ops to care about other new co-ops in their state. And that was really humbling. But I’m continuing that work, particularly with Start.coop, an accelerator for new co-ops that I co-founded with Greg Brodsky. Greg is a tremendous co-op innovator and the son of CCA Global founder Howard Brodsky, a towering leader in the global co-op movement, who was my main partner on the Summit in Colorado.
I really wanted to work with Greg with that legacy in mind, so that this could be a site where we can bring together the generations. Start.coop is an accelerator for new co-ops, structured so that we can bring in the older generation of cooperators as funders and mentors of the new generation. We’re very much in the midst of trying to make that a reality.
A second piece is the importance of policy. Most of the major cooperative sectors in the United States — electric co-ops, agriculture, and credit unions — all have specific, tailored federal policy structures that grant them access to appropriate financing. These have all been incredibly successful economic development programs, but still co-op financing remains contained in just a few narrow sectors and industries. This makes it very hard for the co-op movement to address emerging social challenges creatively.
Since writing the book, I’ve spent time with the legacy of Louis Kelso who was an innovator not so much in the co-op world but in the concept of an ESOP. In addition to the fact that he was from Colorado and got his degrees from my university, he managed to secure a fairly modest tweak to federal law in a way that opened the floodgates to enabling 14 million people to co-own their employers. In addition to that modest tweak, he had an ambitious vision of spreading shared ownership across the economy — an ambition that I think we desperately need.
For several years now, I’ve been arguing that the biggest shortcoming of cooperative policy has been that it’s been too siloed. We created policy for credit unions and for electric co-ops, but none of that helps with the problems that a lot of people are facing today because those policies are too restrictive.
We need to open the door for any kind of cooperative to operate on a reasonable footing in the economy. One thing that I’m very excited about right now is the bill that was just introduced by one of my senators, John Hickenlooper, the Capital for Cooperatives Act. It is the first major piece of legislation I can remember that actually opens the door at the federal level for financing for any kind of cooperative, at least any kind that the SBA can support. It could be an incredibly powerful step in the right direction.
New Lexicon: Surveillance Capitalism
I don’t read many 500-page books, but I knew Shoshana Zuboff’s Age of Surveillance Capitalism looked worth the time and it was. Not because the book is perfect but because it is a kind of intellectual earthquake. I recommend it strongly.
Zuboff, an emerita professor at the Harvard Business School, argues that we have moved from an age of Big Brother (the state) to what she calls the Big Other (the big platforms). Which means we are far beyond ideas of privacy and just worrying about snooping on our purchasing habits. It’s an entirely new form of water we are all swimming in — she calls it surveillance capitalism.
Over the last decade or so, Zuboff argues, the world has witnessed the construction of a global architecture of behavior modification which has gone rogue. It is the dystopian vision of radical behaviorist B. F. Skinner, whose technocratic approach to human interaction back in the 1950s was much criticized and left for dead, only to be recently re-empowered by Google and their partners.
This new form of capitalism now threatens human nature itself in the 21st century, the author argues, just as industrial capitalism disfigured the natural world in the twentieth. This architecture of what Zuboff calls instrumentarian power (i.e., a form of manipulation, not physical power) dangerously overthrows the people’s sovereignty in unprecedented ways, hidden from democratic oversight.
You may have heard the cliche, “we are the product.” Actually, we are actually the raw material, in the form of the behavioral surplus (formerly known as “data exhaust”) of our voices, personalities, emotions, fed into machine intelligence to make prediction products tradable in behavioral futures markets. That’s the game. (You were worried about someone one wanting your purchasing history on Amazon or Netflix? Small potatoes.)
This book is many things, including incredible case studies of Google (and Facebook) which detail the way the former corporation gradually realized and then leveraged the unforeseen value of all the metadata its search engines were generating.
Describing Facebook’s strategy, Zuboff actually devotes three sobering pages to what actually happens when you click the “Like” button (introduced in 2010). For starters, we learn that the button is “a powerful supply mechanism from which behavioral surplus is continuously captured and transmitted, installing cookies in users’ computers whether or not they click the button.” [My emphasis.]
You begin to realize we’re talking here about a radically new business model, that of LaaS or Life as a Service. Meaning, your life — and your autonomy.
It is chilling to watch Zuboff map out these developments and the way they occurred simultaneously and in conjunction with the War on Terror, a convergence that finally put the big platforms in possession of more powerful surveillance tools than anything the FBI, CIA or D.O.D. could deploy.
We advocates of platform cooperativism retain hopeful visions of owning our own data. The latter strategy, like proposals for advanced encryption and improved data anonymity, Zuboff argues “only acknowledge the inevitability of commercial surveillance.” We are fighting what she terms technological “inevitabilism,” a powerful and deterministic force which also defeats our human abilities to control our own lives and the entire realm of human freedom via politics.
For a detailed, partially critical evaluation of Zuboff, you might want to read an epic response by Evgeny Morozov which makes a number of interesting points. In some ways, Nick Srnicek also warned back in 2017 about the coming “platform wars” in his excellent book — recommended as well.
Why Worker Co-ops, a New EO Podcast Offering with Rodney North
Part of the growing family of podcasts from Brett Keisling’s EO Podcast Network, Why Worker Co-ops launched last week. Host Rodney North’s guests for the debut episode were Keisling and fellow EO Network show host Jesse Tyler — about whose own podcast Owner to Owner, focused on ESOPs, you’ll be seeing more soon in this newsletter.
We asked North a few questions about this new biweekly offering.
You are a veteran cooperator with Equal Exchange and have worked as a consultant to co-ops. What was the germ of this idea for a new podcast show?
Well it started with a conversation with Brett, who comes from the ESOP world. After starting his show, the EO podcast, he began to run into more people involved with other kinds of employee ownership — especially worker cooperatives, also employee ownership trusts — and he got super excited about that.
He realized he couldn’t handle all the conversations that he wanted himself, and since he lacked a co-op background, maybe he wasn’t the best person to lead those conversations. So eventually we met and we clicked. Next I was on his show, we stayed in touch, and then he recruited me to start up a co-op podcast.
And tell us about the focus of the show — who’s the audience you’re seeking?
The co-op model is one we’re all sold on but we want to bring it to people who don’t get it yet, so to speak. People who are one degree removed from co-ops — that could be their customers, their investors, policy makers, and so on. Likewise with people from credit unions, consumer co-ops or rural electric co-ops who have a kind of co-op connection but don’t understand worker co-ops.
Anything for worker-owners?
Definitely! I’m a 20-plus year co-op veteran but I am learning new things in each of these podcast conversations. So maybe not every episode but pretty often there’ll be something new for experienced cooperators too.
What sorts of topics do you foresee for the show?
Well, a lot of conversation lately is about conversions, keeping businesses afloat who might otherwise shut their door by converting them to worker-owned. People are talking about how worker co-ops address wages and income inequality. Then there’s co-ops as a source of strategic business innovation — the kind of thing the Obran cooperative in Baltimore is working on. (Joseph Cureton of Obran is one of our first guests.)
Then there’s also co-ops as a place to stretch your democratic muscles. What if your experience at work was not that of a cog in a wheel but a place where you get a taste of democracy and get to practice it, too, in addition to egalitarian pay scales and all that!
Congrats on the launch — we’ll be listening!
Capita’s Cooperatives and Child Care Case Study
Why have co-op businesses proved to be so much more agile and sustainable during the Covid-19 crisis than conventional businesses? Even co-op daycare centers, which are usually fairly fragile enterprises under the best of conditions, have managed to hold up comparatively well.
As the piece notes, “Founders Susan Kavchok and Teresa Mansell believe Childspace would not have survived COVID-19 had it not been a cooperative. Its members’ diverse perspectives enabled responsive decision making that would not have been possible in a traditional business structure with a director making decisions on her own.”
Recalling (and Replicating) the Power of “Nun Money”
Over at Faith+Finance’s blog, serial entrepreneur and co-founder Kevin Jones recently posted a wonderful profile of Sr. Corinne Florek of the Dominican Sisters of Adrian. After more than 40 years of investing, she’s known as “the godmother of community development finance” — and for good reason.
Jones explains, “From the Calvert socially responsible investment fund to Community Development Finance Institutions . . . , to Root Capital, which created the fair trade industry, it was ‘nun money,’ as it’s called in the investment world, that could be counted on to be flexible, to take a risk no other institution would. Their money was incredibly long term, patient, and they only asked for a two percent return, understanding that there is a cost to doing good.”
Sister Corinne says is appalled at so-called impact investors who demand that their investments designed to do good get market rate returns. “If you have money to invest, stop trying to earn more off the backs of the poor.”
When impact investors cite the risks they take as the reason for high rates of investment return, she notes that her funds didn’t lose any money in 2008 when the market rate investors losses skyrocketed. “There is more risk on Wall Street than investing in the poor,” she adds.
The team at co-op accelerator Start.coop has just re-launched the website that shares the name, with lots of free resources, including:
- The Lean Co-op Course
- Case studies
- An investor-entrepreneur matching tool
- Info on the accelerator program, application process, funding ($10K investment, up to $50K follow-on funding), and more
You’re invited here to involvement in Start.coop’s work: you can donate, invest, nominate (a startup for participation in the accelerator), and / or mentor.
Editor’s note: The version of the second part of our conversation with NPQ’s Steve Dubb initially published with the previous issue was an unreviewed draft containing several errors and published mistakenly. The current article is the corrected final version.
We regret the error, and we acknowledge that it’s not the first time. We’re grateful to be able to offer such first-rate material in this newsletter as the insights Steve shared with us. Our team, still quite small, is working to bring our process up to standard.
Coming in Issue 13, October 19
- Daniel Fireside on keeping the mission in mind
- Nathan Schneider’s reflections on Everything, part 2
- Janelle Orsi on the shift to Land Craft
Article ideas? Submissions? Helpful suggestions?
Contact the editor: firstname.lastname@example.org.
If the present issue’s been forwarded to you and you’d like to see this in the inbox on a regular basis — the schedule is biweekly — just visit the site and sign up. It’s free.
Meanwhile: forward to a friend.
- Elias Crim, Editor
- Leo Sammallahti, Europe Correspondent
- Paul Bowman, Design Mgr. / Content Mgr.
- Felipe Witchger, Publisher
Disclaimer: The content of Ownership Matters is for informational purposes only. Such information should not be construed as legal, tax, investment, financial, or other advice. Nothing contained in these materials constitutes a solicitation, recommendation, or offer to buy, or a solicitation of an offer to sell, any securities. Subscribers / readers agree not to hold the authors, their affiliates or any third party service provider liable for any possible claim for damages arising from any decision made based on information published here.