Ownership Matters|Issue 21
Inside Solidarity Economics; Turning Franchising Upside Down; “Move Fast and Repair Things”
- Editorial: Move Fast and Repair Things
- Interview: Arizmendi Association of Cooperatives’ Tim Huet
- Books: Benner and Pastor’s Solidarity Economics
- NPQ Event: Redefining Risk — Thurs. Mar. 10
- How to Become Certified EO
- OM Reader Gathering — Thurs. Feb. 24
- Editor / Reader Circle Launched!
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share this segment by right‑clicking icon to copy linkMove Fast and Repair Things
Toward the end of Part Two of our interview with Arizmendi Association founder Tim Huet (to be published in the next issue), he makes a striking comment (my emphasis):
One of the things I’m hopeful about is the growing number of organizations who are looking at the “silver tsunami” of retiring CEOs scaling up to help them convert their businesses in a quick way. I think that’s a good strategy to be taking.
I also think it’s important because of my long-time belief that co-ops are not going to just gradually replace the existing economy. We are trying to build in recognition of the fact that there will be more and more economic crises. And when those crises come, we will have to have the capacity to rapidly expand.
Translation: we in the solidarity economy movement are building — as quickly as we can — alternative institutions, given that we have entered a new reality of cascading crises in which our old institutions are already failing us. As the work of the Arizmendi Association over the last quarter century shows, a crisis can generate creative responses within us if we allow it to do so.
The urgency in Tim’s tone also suggests a slogan, playing on the Silicon Valley mantra of moving fast and breaking things. Let’s move fast and repair things.
To do that, we will need to demystify and de-invisibilize all those protected fiefdoms of finance — venture capital, private equity, REITs, etc.
We’ll need to see “movement investing” — that’s already happening. (If you want an insider’s take on movement investing, don’t miss our upcoming conversation with Dan Fireside.)
We’ll need new B-school classes on “social finance.” (We also need new B schools, of course.) As part of community organizing, we want the rise of investor organizing.
We need to move fast — or better, as someone suggested, we need to move at the speed of community.
share this segment by right‑clicking icon to copy linkTurning the Franchise Model Upside Down
A Conversation with Arizmendi Association of Cooperatives Co-founder Tim Huet
Tim Huet is an attorney and community organizer whose work focuses on worker cooperatives. He is a founder and serves as in-house counsel for the Arizmendi Association of Cooperatives, an enterprise that replicates successful worker cooperatives, starting with a bakery model. He has published articles on worker cooperatives and self-management in Dollars & Sense, Stanford Law & Policy Review, and Peace Review, and at Grassroots Economic Organizing.
Thanks for offering to do this. Starting with a bit about your background, you were trained as an attorney.
Correct. And along the way I read about cooperatives. And when I read about the Mondragon cooperatives in particular, I thought, this is what we need to do. Because if you don’t change the economy, you don’t really change the basis of the society.
So I started looking around for examples of things that change the economy and ran across a book about the Mondragon cooperatives. I read that and said, that’s it, that brings it all together. An economic basis for teaching people how to run a society democratically. And I started looking around for other people who were interested in that.
We formed a study group and wondered why there were more successful networks of cooperatives in other parts of the world than in the U.S. We learned a great deal and then we also learned a lot through making our own mistakes. For instance, with our first co-op, we did a really good job training the founders how to manage the co-op, but we didn’t teach them how to teach the next generation.
So we changed the recruitment process for the next cooperative where we only chose, I’d say, three quarters of the people who we thought we needed for the co-op so that we could help those folks recruit the last few people and train them. So it became a process of not just training people in things but training them well enough that they could adapt it to their own culture and keep carrying on.
We seemed to attract people who already knew about the co-op movement, which is not necessarily what we wanted. We wanted to recruit new people into the cooperative movement.
Later on, we decided first on the neighborhood we wanted to develop in before we recruited people — instead of just recruiting people and then picking the neighborhood, which left us with a very unfocused group. So we had a mission to make it a much more diverse group from the beginning.
So you felt it would help to recruit in a localized way?
Yeah, we wanted our cooperative members to be part of that local community. Although we didn’t discriminate against people if they came from further away.
The theme of leadership, or self leadership, came out there a little bit. It sounds like you’re one of the few groups that’s really kind of thinking about that dimension in making these businesses sustainable. Tell us a little bit about how your thinking has evolved on that subject.
Sure. I come from a background where there was a lot of bias against even the concept of leadership, like it’s a negative thing. Because if you have leaders, you have other people that are followers, we didn’t want to have that.
And I came to feel over time that that was a very toxic thing on the left and among progressive organizations, that in fact we need leadership, and part of the role of a democratic leader is to make other people into leaders.
We learned that the association needed to provide some education, particularly around worker ownership. When a business is new and has the greatest need for labor and fast growth, it tends to throw people into the work at the cash register or in front of the ovens. There’s not much time to develop the larger skills.
So we started to put on orientation sessions — six different ones that we provide at the association level for anyone hired at any of the individual co-ops. And we added one that was called democratic participation in leadership so that we could talk to people about what their pre-hire views on leadership were. We ask them the question, what should leadership look like in a co-op context? And how do we build towards that?
share this segment by right‑clicking icon to copy linkThe Hopes for a Movement of Movements
Solidarity Economics: Why Mutuality and Movements Matter (2021) by Chris Benner and Manuel Pastor
The authors of this relatively short book manage to pack in a lot:
- a quick history of the dark opposite of solidarity economics and the force which brought it into prominence globally — i.e., neoliberal economics,
- a description of what solidarity economics actually means on the ground, and
- an overview of some key actors and movements in this global effort while attentive to the dimensions of racial capitalism at work today.
What are the major premises of the solidarity economy? According to Benner and Pastor, there are three, each of which requires some unpacking: 1) it’s our economy, not the economy; 2) we do better when we act together; 3) social movements will be crucial to change.
If the economy is something we all own, we’re saying it’s not an impersonal system over which no one has control. We empower ourselves to push back on the half-century of failed utopian thinking and societal damage done by the architects of neoliberal economics — the supply-siders, trickle-down theorists, and “shock therapy” adherents who have done so much to create the social collapse well underway in so many countries today. (If you wonder why Vladimir Putin has retained his popularity with many Russians, recall his arrival in 2000 as the guy who put the safety net back in place and pulled the country away from Yeltsin’s catastrophic free market “reforms.”)
Changing our thinking about our economy has important real world impacts. If your economics assumes a genetic disposition toward selfish behavior, you’ll find people advocating for policies that align with or even foster that behavior.
But our everyday experience disputes that false image of human nature. Take the social practice of tipping in restaurants.
Why, if we try to think like economists for a moment, do people tip? The research (cited in the book) shows it’s not from self-interest. You’ve already enjoyed the meal, so the exchange has happened. Nor does tipping seem correlated with better service on future visits or even repeat visits to a restaurant. In fact, standard economic analysis cannot account for tipping. The practice seems related to a shared social sense (a glimmer of solidarity, you might say) that the tip is an ethical way of recognizing the wait person and showing support for them.
The second premise — acting together — is a shorthand way of emphasizing the importance of a social economy, one in which the economy is embedded into society, not extracting (and not replacing) value from it. The authors cite Heather McGhee’s The Sum of Us for her point that mutuality, grounded in racial justice, creates broad-based prosperity. The pandemic has dramatically highlighted the difference between countries with a high degree of social solidarity — Vietnam, Korea, Japan, Taiwan — and the U.S. or Britain.
Covid’s impact as an international stress test of our societies has revealed much about the degree to which our communities practice solidarity economics, as in the definition the authors cite from Emily Kawano, Coordinator for the U.S. Solidarity Economy Network cooperation, mutualism, sharing, reciprocity, altruism, caring, gifting.
Finally, social movements are not typically thought of as economic actors — but that’s where the solidarity economy again is different. The authors cite the Living Wage movement from the 1990s which resulted in over 100 cities and jurisdictions (including Baltimore, Chicago, and Oakland) adopting living wage ordinances. In the wake of that effort, there followed the “Fight for $15,” instituted by the SEIU in 2012. The National Domestic Workers Alliance, led by Ai-Jen Poo, was created in 2007 as a network of 13 organizations and now comprises over 75 local affiliates with over 250,000 members in all fifty states.
Movements like these, the authors suggest, have certain shared characteristics when they succeed:
- A broad base beyond circles of experts;
- A focus on transformative change over tinkering with rules;
- Emphasis on shifting norms as part of inculcating new values;
- Focus on developing new narratives;
- Courage to scale in both organizing and systems impact;
- A framework for visible, tangible action;
- “A steely-eyed vision of who is opposed, distinguishing between those who can be persuaded and those who must be constrained.”
Highly recommended and let us stay steely-eyed.
Upcoming : Thursday, March 10
share this segment by right‑clicking icon to copy linkRedefining Risk
A Nonprofit Quarterly Remaking the Economy Event
Our system works on certain assumptions about risk and its definition. And who bears it (usually those with the fewest resources). This means investment in low-income communities and communities of color are often denied: “too risky.”
In this installment of NPQ’s Remaking the Economy series of webinars, participants challenge those assumptions and discuss how to shift risk to those who can afford to bear it, along with building wealth in these communities.
The event’s panelists:
- Deborah Frieze is president and founder of the Boston Impact Initiative, a place-based impact investing nonprofit that aims to close the racial wealth gap by changing the rules of how capital flows through communities of color.
- Kate Khatib, based in Baltimore, is co-director of Seed Commons, a national network of locally rooted, non-extractive loan funds that supports worker co-op development in over two dozen cities.
- Ojan Mobedshahi, based in Oakland, California, is finance director of East Bay Permanent Real Estate Cooperative, a community-led cooperative that buys and preserves real estate to keep tenants of color in Oakland.
This webinar will explore:
- How does traditional risk assessment impact communities of color and marginalized communities?
- What is integrated capital vs. traditional capital?
- What are some promising approaches to “de-risk” community-based projects?
- What does it mean to use non-extractive finance? How does it differ from conventional business lending?
- What role can public policy play in shifting who bears business risk?
- What steps can nonprofits and philanthropy take to help change how risk impedes wealth building in low-income and BIPOC communities?
This event is scheduled for 2 PM ET, Thursday, March 10, and will be recorded. Sign up at the NPQ site to attend or receive further information.
share this segment by right‑clicking icon to copy linkHow to Become Certified Employee Owned
Behind the words “organic,” “fair trade” or “B Corp” are years-long campaigns to build an awareness of a category with certain definitions — even a certification process.
Launched by Thomas Dudley in 2017, Certified EO is a national membership organization, now with over 400 employee-owned companies signed up.
Their goals: 1) increase engagement (help your employees think and act like owners); 2) reduce turnover (show people the value of long-term wealth building); 3) save time (leverage tools proven at other EO companies); 4) recruit top talent (attract job seekers who fit with your ownership culture).
And Certified EO is serious about their standards for certified members:
- At least 30% of the company must be owned by employees (excluding founders),
- reasonable access to ownership must be open to every employee, and
- ownership among employees cannot be too concentrated.
Upcoming : Thursday, February 24
share this segment by right‑clicking icon to copy linkOM Reader Gathering: Dan Fireside on Lessons in Financing Social Change
We’re inviting our readers to join us as we host our own new contributing editor, Dan Fireside, at this inaugural monthly event on Thursday, Feb. 24, 12:00–1:00 PM ET.
Here’s a chance to hear and speak with an experienced movement builder reflecting on why capital-raising for employee owned businesses is so hard (for companies and investors), and where he has found it does work.
Dan, as readers of the newsletter will recall from our two-part interview in November, is the founder of Uncommon Capital Solutions, a board director at Namaste Solar, an advisor to the Main Street Phoenix Project, and Fundraising Coordinator for Downtown Crenshaw. He was the Capital Coordinator for Equal Exchange for just under eleven years, beginning in 2010.
As a subscriber, you can expect an email on Wednesday with link for joining Thursday’s session. We hope to see you!
In the meantime, if you haven’t already, take a moment to let us know if you hope to attend — and leave a note of thoughts or questions to sharpen our conversation with Dan.
share this segment by right‑clicking icon to copy linkEditor / Reader Circle Has Launched
A Dedicated Conversation Space for Our Subscriber Community
We have energized, engaged readers at Ownership Matters. Our editors will now have a new channel to communicate with you and you’ll be able to comment in response.
The Editor / Reader Circle will host comments, reflections, questions related to newsletter articles and beyond. Participation is open to all subscribers, but isn’t automatic with subscription. You’ll need to sign up and receive login credentials.
An inaugural invitation to participate went out to current subscribers on Monday of this issue’s week of publication — yesterday — with the subject line “An Invitation to Join Our Editor / Reader Circle.” If you’re a subscriber and haven’t yet given this email a look, take a moment and do that now! If you’re not yet a subscriber and don’t want to miss out . . . well, your next step is clear.
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See you in the Circle!
Coming in Issue 22, March 8
- Interview: Tim Huet of Arizmendi Association — Part 2
- Books: David Ellerman’s Neo-Abolitionism
Article ideas? Submissions? Helpful suggestions?
Contact the editor: email@example.com.
- Elias Crim, Editor
founder, Solidarity Hall; former business journalist and publishing consultant
- Júlia Martins Rodrigues, Managing 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.
- Felipe Witchger, Publisher
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