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  • A Thriving Cooperative Ecosystem; Co-ops and DAOs; The Economics of Arrival (issue 19)

    Ownership Matters|Issue 19

    A Thriving Cooperative Ecosystem; Co‑ops and DAOs; The Economics of Arrival

    25 January 2022

    This issue:

    • Editorial: Pitching Tents in a Hurricane
    • Interview: Cultivating a Cooperative Ecosystem
    • Books: The Economics of Arrival
    • Commentary: Are You Financing a Genocide?
    • Cooperatives and DAOs
    • NPQ Event: Black Food Sovereignty — Thurs. Feb. 10

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    image: Stocksy.coop Depth in place rather than expansion merely, Molly Hemstreet suggests, should be the rule guiding cooperative organizations confronting the problem of growth.
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    Editorial

    share this segment by right‑clicking icon to copy linkPitching Tents in a Hurricane

    Elias Crim

    I want to share some numbers relating to business startups I recently came across for our mutual consideration here.

    In 2015, according to a recent New York Times article, 80 tech startups were each worth more than $1 billion. Today? It’s more than 900.

    To describe this environment, the Times piece uses the words “froth,” “crazy,” “frenzy.” Mostly we can blame the pandemic for the bonanza in tech-enabled business ideas, especially in the sectors of food delivery, remote-work, and telehealth. As a broader indicator of the times, Apple’s valuation has now topped $3 trillion.

    For startup folks, we have even entered a period of the “reverse pitch.” These are unsolicited emails containing pitch decks of research from investors ready to write big checks to founders. The Times article quotes a founder who received pitch videos featuring celebrities the funders hired to make their case. Founders can start raising money on a Friday afternoon and have a deal closed by Sunday night.

    In this environment, U.S. startups raised $330 billion last year, nearly double the record number for 2020. The value of startup exits — whether as a sale or a public offering — spiked to $774 billion, according to PitchBook.

    Here’s another number: $400 billion. That’s the combined valuation of all companies that passed through the Y Combinator accelerator over the last 16 years. It invested in Airbnb, Dropbox, DoorDash, Stripe, Reddit, and more now-familiar names.

    What’s changed in recent years is both the tempo of development for these deals — from years to mere months — and the equity situation for founders. If you can manage to retain 1% equity in your billion-dollar accelerated unicorn startup, your brilliant idea makes you worth . . . a paltry $10 million.

    One Web3 response to this situation is called Blockzero Labs, an accelerator structured as a DAO and thus accepts tokens from the projects it accelerates. It even issues its own token, XIO, and has distributed 100% of the supply to its community of 4,000. (For more on DAOs, see our note elsewhere in the issue on their promise for co‑op businesses.)

    Capital deployed on this scale and with this kind of concentration is frankly daunting when we compare it with the size and relative fragility of the solidarity economy and shared ownership movements.

    We are tempted to feel as though we are pitching tents in the midst of a Category 7 hurricane. But we simply can’t wait for the storm to pass. Stay steady. 

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    share this segment by right‑clicking icon to copy linkCultivating a Worker-Powered Cooperative Ecosystem in Western NC

    A Conversation with The Industrial Commons’ Molly Hemstreet

    Elias Crim

    Molly Hemstreet is the founder and general manager of Opportunity Threads, the largest U.S.-based, worker-owned cut-and-sew facility. In 2015, she co-founded The Industrial Commons, a nonprofit dedicated to teaching democratic workplace principles and worker-ownership. In 2013, she co-founded the Carolina Textile District, a network of textile mills that works together to respond to demand for sustainably produced U.S. goods and builds a platform for worker participation.

    EC :

    Great to have a chance to talk with you. Maybe we could begin with any recent updates you might like to offer on your work — the many things you’ve got going on!

    MH :

    Well, I would say the work is growing but that also brings some questions. Where we are right now is really thinking about scale and growth without loss of core values, or the DNA that I think has helped us be successful to date.

    So we have incubated individual co‑ops, as well as our industrial cooperative network with the Carolina Textile District. And now we’re looking to expand cooperativism within our industrial ecosystem — to include shared cooperative ownership of land and housing, and then looking more at social cooperatives.

    So I would say that is kind of where we are right now, in terms of new work we’re doing. And then in terms of growing the co‑ops we have, it’s about really centering and rooting those very deeply within and around the circular green economy — and partnering with larger brands.

    So how do you partner with folks that already have a bit of a corner on the market but they want to green their product offerings? We can both green them and do them as worker cooperatives as well. So I would say that’s one direction we have.

    And then I do think we’re looking at these questions of what our work will look like in ten years. And how do we build the structures right now to allow the work to be thriving in another ten years?

    EC :

    You mentioned land and housing co‑ops. What’s the project you have underway in that area?

    MH :

    So everything is part of the Industrial Commons. There’s Capital for the Commons, which is our internal loan fund, which serves our own enterprises. And then we have Land for the Commons. So these are all separate LLCs.

    But there is one that we were putting on hold where we said, Oh, let’s not do this, because we have too much on our plates. But the universe said otherwise. And so we have now like 40 acres of land and development for industrial, small-scale micro-manufacturing, and also for what we would call workforce housing. But we will be using cooperative models, and we’re trying to figure out what those are. We’re doing a lot of research on what that model will be.

    EC :

    In terms of creating some flavor of housing co‑ops?

    MH :

    Yes, we’re deciding which flavor of housing co‑ops, that’s a good way to put it. There are a lot of flavors of housing co‑ops.

    EC :

    I just was thinking as I was reviewing my notes on Industrial Commons, are you folks running the only social co‑op at any scale in the whole country? Who else is doing social co‑ops?

    MH :

    I think it depends on how you define that. We picked up some things from creating our “learning journey” white paper last year, written by Margaret Lund. It looked at co‑op ecosystems in Quebec, Mondragon, and the Emilia Romagna region — including social co‑ops.

    I think one thing we saw in the Italian model during the pandemic is the importance of the spaces they use. They’re not housing spaces, they’re not workspaces — they use spaces that serve a social need.

    And in the case of our work, that’s really space for kids. So that’s how we’re organizing all our outreach. It’s through the art community, and it will double as childcare. Our art space is part of our membership vision, it’s not just part of an after school program. There’s decision making and governance involved.

    I think that we’re kind of very loosely calling those social cooperatives. And I think that was one of the conversations we took up. But we’re really inspired by our friends up the mountain at Poder Emma that have a strong early childhood co‑op network, doing a lot of care for children in their homes and also employing women in their homes.

    So it’s not housing, it’s not business, it’s something else. So we put those projects in our social co‑op capital bucket, but I’m sure there are other people out there doing it much better and at a much larger scale than we are.

    And on the question of replicating ecosystems, I think there are certainly these shared learnings. Poder Emma is very strong in housing and the social cooperatives. I feel like our strength is really around business and industry cooperatives. So we’re really looking to learn a lot from them around how they’re organizing those spaces. We have a very structured exchange of learning. And we do a lot of training on the back end together.

    Read the rest: Cultivating a Worker-Powered Cooperative Ecosystem in Western NC
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    Books

    share this segment by right‑clicking icon to copy linkBringing the Economy in for a Landing

    Katherine Trebeck and Jeremy Williams, The Economics of Arrival

    The subtitle of this excellent book is “Ideas for a Grownup Economy,” by which the authors mean an economy whose maturity is grounded in a sense of “enough.” Improvement, not enlargement.

    As we rediscover the difference between the economy and what used to be referred to as political economy (a broader term meaning socio-economic reality), it’s easy to notice the search for new stories, images, metaphors. Some striking new frameworks have been offered in recent years: the economy as a doughnut (Kate Raworth), ideas of economic “gardening,” a “moonshot” economy (Mariana Mazzucato), the circular economy, etc.

    Authors Trebeck and Williams recall the ideas of W. W. Rostow in his infamous Stages of Economic Growth — a kind of 1960s cookbook for American economic domination in the world — that the goal of “developing countries” was to reach “takeoff.” This aeronautical metaphor has only begun to be questioned in the last generation, given that no one seems to know when our economies are supposed to finally land somewhere. So when, the authors ask here, do we arrive at home at last?

    In terms of wealth, many countries have already arrived and can make themselves at home having reached a state of adequacy and ample sufficiency. Growth for its own sake is no longer necessary nor beneficial.

    Consider that between 1950 and 2010, global GDP grew 10X, the number of cars in the world has passed the 1 billion mark, international tourism went from 50 million visits / year to over 900 million, and the number of phone subscriptions is now over 6 billion. We have also seen the rise of “voiceless” growth — without improvement in democracy — and “rootless” growth — coming at the expense of cultural identity or a loss of minority identity.

    Growth, the authors point out, has also worked as a way to avoid the topic of redistribution. Instead we have been served fake redistribution in the form of greater access to consumer credit or “privatized Keynesianism using fake wealth.”

    What is now needed is an economy that values true sharing and “predistribution” — i.e., the will to avoid inequality at the outset by expanding asset ownership via cooperative businesses, neighborhood trusts, regional energy, benefit corporations, and social enterprises.

    Over-development is thus the cage which we have built for ourselves instead of realizing that we possess the means for life but have forgotten the art of life.

    Where might we find examples of economies which have arrived? The authors cite two, even if less than perfect: Japan and Costa Rica. It’s fascinating that many now view Japan’s “lost two decades” of little or no growth as a post-growth exemplar. This period of low growth, they argue, demonstrated the redundancy of growth in a mature economy, one which continued to operate at a world-class level.

    Costa Rica is a notable over-performer on the Social Progress Index, a country with high measures of wellbeing coupled with low resource and energy consumption.

    In fact, the movement away from our historical focus on GDP as a proxy for progress seems to be accelerating. The authors list a number of alternative measures, including the Genuine Progress Indicator (now used by the states of Vermont and Maryland as a planning tool), the Happy Planet Index (New Economic Foundation), the U.N.’s Human Development Index, and the OECD Better Life Index, among others.

    The book is a compendium of programs and initiatives which share a focus on a wider definition of wealth, to include health, relationships, meaningful work, participation in society. Less a collection of government programs than many disparate signs of a coming societal shift. It cannot arrive too soon. 

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    Commentary

    share this segment by right‑clicking icon to copy linkAre You Financing a Genocide?

    A Uighur Expatriate Urges Us to Reflect

    Júlia Martins Rodrigues

    The high-security re-education camps built in the far-west Chinese region of Xinjiang for the Uighur people systematically meet every definition of a genocide including claims of indoctrination, sexual abuse, forced sterilization, organ-harvesting practices, and enslavement under the pretense of suppressing religious extremism and terrorism.

    We know the authoritarian Chinese government has a history of denying political actions and fundamental rights to its citizens, repudiating the continuous march democracy has followed along a non-linear pathway since its first draft in the polis of Athens. However, what the Uighur genocide exposes has even more to say about our own democracies than its mere absence on Chinese soil. The Greeks’ greatest invention has not fully penetrated the full human social fabric, particularly into the economic sphere, even in societies that claim to adopt a democratic rule of law at the heart of their constitutions. Under hierarchical and authoritarian institutional designs, the current permissiveness in the merciless performance of global economic oligopolies reveals the mismatch between the fundamental values nurtured in the political sphere and the power dynamics experienced in the empire of global finance.

    Not only do businesses headquartered in democratic systems consistently fail to uplift democratic rights within their workplace, but they often benefit from human rights violations perpetrated overseas by dictatorships.

    One of the worst examples of this trend is the lobbying effort of U.S.-based corporations against the Uighur Chinese labor bill introduced in the U.S. Congress last year. Famous brands like Nike and Coca-Cola, as well as contractors connected to Apple, Microsoft, Google — the faces of our consumer society — added to the outrageous list reported by importing goods made through Uighur mass forced labor in detention camps. This time, despite the corporations’ cynical efforts, the U.S. Department of State expressly acknowledged the ongoing crimes against humanity over Muslim Uighurs in 2021 Then the Uyghur Forced Labor Prevention Act passed in the Senate and was endorsed in House banning imports from China over slave labor in early December 2021. Just before Christmas that year, President Biden signed the commitment to combating forced labor Perhaps it is still too early to claim victory when most countries have not moved in the same direction, allowing an avalanche of products made in China without due rigor regarding the nature of the labor used. Moreover, the new law might face serious enforcement issues on the cusp of capitalism precarity feeding our hyper-consumption society.

    The genocide and indoctrination of an ethnic minority in Central Asia is one more per se proof of the non-linear nature of democracy in humanity’s development. Combined with the international economic interests supporting the repression of the Uighur people, democracy has been put on its deathbed in recent years by the global system of corporate capitalism. Even self-regarded communist states like China find capitalism the pathway towards market dominance, feeding Western companies cheap labor and goods. China has been able to exploit the profit-above-all mindset to flood the world’s shelves with their production creating a general dependence on their power. In practice, the Xinjiang province’s cotton production and oil reserves serving the global market has benefitted from the operations of the concentration camps, through ethnic and religious targeting, despite the (still scarce) protests coming from the international community.

    Xinjiang province, the ancient and formerly independent home of the vibrant Uighur culture, has experienced harsh dispute over natural resources, given its strategic localization in the heart of Asia. The government’s campaign of cultural marginalization and persecution, artificially imposing Chinese ethnicity onto a people who are closest to the Turks in their language and religion, has been instrumental in weakening the Uighurs’ local presence in state-run operations. The tension has been escalating since 2009 when major protests against exploitation and rampant inequality arose in the region. Within less than a decade, the conflict led to the mass incarceration of millions of Uighurs. Despite the lack of reliable data, the current persecution seems to be on an even broader scale than that recorded against the Jewish people during Nazism, but the joint international response that ended European fascism has not yet been as strong in this Chinese case.

    During my doctoral studies in Europe, I had the pleasure of meeting my dear friend Dr. Mamat who was my neighbor at the time and currently works as a physics researcher based in France. He is a Uighur expatriate vocal about the genocide inflicted against his people and agreed to grant me an interview despite real concerns of retaliation. The Chinese government’s restrictions on communication obstruct his contact with loved ones, despite the fact he knows his brother, cousins, and friends have been arrested without the due process of law or any further explanation. Terror has taken overcome most of these Uighur peasant families while the international community remains quiet and dumb.

    Read the rest: Are You Financing a Genocide?
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    share this segment by right‑clicking icon to copy link“Socialist” Co‑ops Meet “Libertarian” DAOs?

    “Can co‑ops thrive on blockchain?” was the question in a gently cautious article by Robert Raymond on Shareable last month. He was asking whether these two communities — technologists and community organizers — can join forces and bring real democracy to decentralized, disruptive technologies.

    The vision of DAO for co‑ops folks is one of DIY decentralized governance and the ability to write your own rules — with your own currency and your own organizational structure. Voting in a large co‑op (think Drivers Cooperative, now with thousands of members) could be done via a phone app. In fact, according to the Shareable piece, Drivers Cooperative is currently exploring the DAO framework. If you’re still trying to pick up the basics about DAOs and digital tokens, Raymond’s piece lays a helpful foundation.

    If you’re ready for the next level up, you need to meet Austin Robey, the founder of digital co‑op Ampled, who also teaches music and platform cooperativism at the New School, and participates in several DAOs (distributed autonomous orgs), including Forefront, Seed Club, and Friends with Benefits.

    FWB is a cultural community of “creators, rebels, artists, thinkers and doers” who are working toward a web3 world of open knowledge which includes creator-controlled data and payments.

    With those credentials, Robey’s recent post, ”What Co‑ops and DAOs Can Learn From Each Other,” is of special interest.

    A few of his key points:

    • While platform cooperativism and the DAO space may be developing in parallel isolation, they have much to share, even the creation of hybrid approaches to ownership and governance
    • DAOs are token-coordinated, internet-native orgs using blockchain as their foundation. They serve a range of purposes — so DAOs for creators, for curation, for investment, even social purpose. Instead of a one person/one vote form of governance, they use one token / one note. (Robey explains this is because “verifying one’s personhood is still a nascent field in the world of blockchain.”)
    • Co‑op history is one of responses to market failures and exploitative economy systems. But DAOs could be used in a similar fashion, Robey suggests — it’s more a question of founding motivations.
    • Although the world of crypto networks and DAOs often cite VC Jesse Walden’s rather diluted concept of the “ownership economy,” it ignores several key features of true ownership important to cooperators.
    • Unlike co‑ops, DAOs have no “Rochdale principles” on which most participants agree. His article explores how some might emerge, such as fusing the DWeb Principles with those of the Rochdale Pioneers.
    • What co‑ops can learn from DAOs: ability to experiment rapidly; bootstrapping with tokens; new ways to exit to community; and new blended models (check out DisCo, among other examples cited).

    Robey’s final point: why choose?

    He hopes for hybrid solutions in which “incorporating cooperative values into crypto networks could take the form of a traditional cooperative that bootstraps its network through on-chain tokenized contributions. Alternatively, a DAO could decide to adopt cooperative one-vote governance in some instances.”

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    Upcoming : Thursday, February 10

    share this segment by right‑clicking icon to copy linkOrganizing for Black Food Sovereignty

    A Nonprofit Quarterly Remaking the Economy Event

    How has the movement for Black food sovereignty developed over time? Are Black-led food cooperatives in cities connecting with the movement to restore Black farming and Black ownership of land? What can nonprofits and philanthropy do to support the movement for Black food justice?

    A panel of organizational leaders hosted by Nonprofit Quarterly will discuss these questions and more on Feb. 10. The panelists are:

    • Darnell Adams is a worker-owner of the Boston-based Firebrand Consulting Cooperative, which provides consulting support to nonprofit, for-profit, and cooperative business — and a member of the Food Co-op Initiative board.
    • Dr. Jasmine Ratliff, based in New Orleans, is co-executive director of the National Black Food and Justice Alliance, a coalition of Black-led groups that builds Black leadership and institutions for food sovereignty and liberation.
    • Malik Yakini is cofounder and executive director of the Detroit Black Community Food Security Network (DBCFSN), which manages the 7-acre D-Town Farm in Detroit’s Rouge Park, and is a board member of the Detroit People’s Food Co-op.

    Moderating the discussion will be Steve Dubb, senior editor at NPQ.

    This event is scheduled for 2 PM ET, Thursday, February 10, and will be recorded. Sign up at the NPQ site to attend or receive further information.

    Coming in Issue 20, February 8

    • Interview: Astrid Scholz of Zebras Unite
    • Inside the East Bay Permanent Real Estate Cooperative

    Article ideas? Submissions? Helpful suggestions?
    Contact the editor: ecrim@ownershipmatters.net.

    Masthead

    • Elias Crim, Editor
      founder, Solidarity Hall; former business journalist and publishing consultant
    • Júlia Martins Rodrigues, Contributing Editor
      attorney (Brazil); visiting scholar, law, University of Colorado Boulder; PhD candidate, civil and constitutional law, University of Camerino
    • Daniel Fireside, Contributing Editor
      founder, Uncommon Capital Solutions; board member, Namaste Solar; capital coordinator, Downtown Crenshaw Rising
    • Zoe Crim, Editorial Assistant
      B.A., linguistics, Indiana University Bloomington; co-founder Fair Trade group
    • Paul Bowman, Design / Content Mgr.

    Advisory Board

    • Jessica Mason, Start.coop
    • Stephanie Swepson-Twitty, Eagle Market Streets Development Corp.
    • Nathan Schneider, University of Colorado Boulder

    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.

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