Tag: co-ops (page 1 of 2)

Challenging capitalism through co-ops and community

The glossy Instagram lifestyle is actually led by a fraction of a fraction of 1% of the world’s population. Instead of us all elbowing each other out of the way in pursuit of that, this article points to a better solution: co-operation.

There are two types of economics active in the world right now — which basically means two radically divergent varieties of economic life. The first is economics as most economists and writers see it and talk about it. The second is economics as most people live it.

Call the first “the top-up.” It’s the economics of competition and asymmetrical knowledge and shareholder value and creative destruction. It’s the dominant system. We know all about the top-up. Tales of the doings of the top-up economy are mainlined into our brains from business articles, financial analysis, stories about our planet’s richest people or corporations or nations. Bezos. Buffett. Gates. Musk. Zuckerberg. The Forbes 400. The Fortune 500. The Nasdaq. The Nikkei. On and on.

Call the second “the bottom-down.” We don’t hear as much about it because it’s a lot less sexy and a lot more sticky. It involves survival mechanisms and community solidarity and cash-in-hand calculations.

But it’s the economic system of the global majority, and this makes it the more important of the two.

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The top-up economic sphere functions like a gated community in which people who have money can pretend that everything they do and have in life is based on merit, and that the communal and cooperative boosts from which they profit are nothing but natural outgrowths of that merit.

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Change always comes from below — and it is in the bottom-down relationships where growth and egalitarianism can flourish. Every volunteer fire department is a community platform. Every mutually managed water system demonstrates that neighbors can build things when they need each other. Every community-based childcare network or parent-teacher association is a nascent collective. Every civic association, neighborhood or church council, social action network or food pantry gives people a broader perspective. Every collectively run savings and credit association demonstrates that communal trust can give people a leg up.

Source: Co-ops And Community Challenge Capitalism | Noema

The proper amount of wealth is that which neither descends to poverty nor is far distant from it

So said Seneca, in a quotation I found via the consistently-excellent New Philosopher magazine. In my experience, ‘wealth’ is a relative concept. I’ve met people who are, to my mind, fabulously well-off, but don’t feel it because their peers are wealthier. Likewise, I’ve met people who aren’t materially well-off, but don’t realise they’re poor because their friends and colleagues are too.

Let’s talk about inequality. Cory Doctorow, writing for BoingBoing, points to an Institute for Fiscal Studies report (PDF) by Robert Joyce and Xiaowei Xu that is surprisingly readable. They note cultural differences around inequality and its link to (perceived) meritocracy: 

A recent experiment found that people were much more accepting of inequality when it resulted from merit instead of luck (Almas, Cappelen and Tungodden, 2019). Given the opportunity to redistribute gains to others, people were significantly less likely to do so when differences in gains reflected differences in productivity. The experiment also revealed differences between countries in people’s views of what is fair, with more Norwegians opting for redistribution even when gains were merit-based and more Americans accepting inequality even when outcomes were due to luck.

This suggests that to understand whether inequality is a problem, we need to understand the sources of inequality, views of what is fair and the implications of inequality as well as the levels of inequality. Are present levels of inequalities due to well-deserved rewards or to unfair bargaining power, regulatory failure or political capture? Can meritocracy be unfair? What is the moral status of luck? And what if inequalities derived from a fair process in one generation are transmitted on to future generations?

Robert Joyce and Xiaowei Xu

Can meritocracy be unfair? Yes, of course it can, as I pointed out in this article from a few years back. To quote myself:

I’d like to see meritocracy consigned to the dustbin of history as an outdated approach to society. At a time in history when we seek to be inclusive, to recognise and celebrate diversity, the use of meritocratic practices seems reactionary and regressive. Meritocracy applies a one-size-fits-all, cookie-cutter approach that — no surprises here — just happens to privilege those already in positions of power.

Doug Belshaw

Doctorow also cites Chris Dillow, who outlines in a blog post eight reasons why inequality makes us poorer. Dillow explains that “what matters is not so much the level of inequality as the effect it has”. I’ve attempted to summarise his reasons below:

  1. “Inequality encourages the rich to invest not innovation but in… means of entrenching their privilege and power”
  2. “Unequal corporate hierarchies can demotivate junior employees”
  3. “Economic inequality leads to less trust”
  4. “Inequality can prevent productivity-enhancing change”
  5. “Inequality can cause the rich to be fearful of future redistribution or nationalization, which will make them loath to invest”
  6. “Inequalities of power… have allowed governments to abandon the aim of truly full employment and given firms more ability to boost profits by suppressing wages and conditions [which] has disincentivized investments in labour-saving technologies”
  7. “High-powered incentives that generate inequality within companies can backfire… [as] they encourage bosses to hit measured targets and neglect less measurable things”
  8. “High management pay can entrench… the ‘forces of conservatism’ which are antagonistic to technical progress”

Meanwhile, Eleanor Ainge Roy reports for The Guardian that the New Zealand government has unveiled a ‘wellbeing budget’ focused on “mental health services and child poverty as well as record investment in measures to tackle family violence”. Their finance minister is quoted by Roy as saying:

For me, wellbeing means people living lives of purpose, balance and meaning to them, and having the capabilities to do so.

This gap between rhetoric and reality, between haves and have-nots, between the elites and the people, has been exploited by populists around the globe.

Grant Robertson

Thankfully, we don’t have to wait for government to act on inequality. We can seize the initiative ourselves through co-operation. In The Boston Globe, Andy Rosen explains that different ways of organising are becoming more popular:

The idea has been percolating for a while in some corners of the tech world, largely as a response to the gig economy, in which workers are often considered contractors and don’t get the same protections and benefits as employees. In New York, for example, Up & Go, a kind of Uber for house cleaning, is owned by the cleaners who provide the services.

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People who have followed the co-op movement say the model, and a broader shift toward increased employee and consumer control, is likely to become more prominent in coming years, especially as aging baby boomers look for socially responsible ways to cash out and retire by selling their companies to groups of employees.

ANdy Rosen

Some of the means by which we can make society a fairer and more equal place come through government intervention at the policy level. But we should never forget the power we have through self-organising and co-operating together.


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The problem with Business schools

This article is from April 2018, but was brought to my attention via Harold Jarche’s excellent end-of-year roundup.

Business schools have huge influence, yet they are also widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed. (There is a whole genre of jokes about what MBA – Master of Business Administration – really stands for: “Mediocre But Arrogant”, “Management by Accident”, “More Bad Advice”, “Master Bullshit Artist” and so on.) Critics of business schools come in many shapes and sizes: employers complain that graduates lack practical skills, conservative voices scorn the arriviste MBA, Europeans moan about Americanisation, radicals wail about the concentration of power in the hands of the running dogs of capital. Since 2008, many commentators have also suggested that business schools were complicit in producing the crash.

When I finished my Ed.D. my Dad jokingly (but not-jokingly) said that I should next aim for an MBA. At the time, eight years ago, I didn’t have the words to explain why I had no desire to do so. Now however, understanding a little bit more about economics, and a lot more about co-operatives, I can see that the default operating system of organisations is fundamentally flawed.

If we educate our graduates in the inevitability of tooth-and-claw capitalism, it is hardly surprising that we end up with justifications for massive salary payments to people who take huge risks with other people’s money. If we teach that there is nothing else below the bottom line, then ideas about sustainability, diversity, responsibility and so on become mere decoration. The message that management research and teaching often provides is that capitalism is inevitable, and that the financial and legal techniques for running capitalism are a form of science. This combination of ideology and technocracy is what has made the business school into such an effective, and dangerous, institution.

I’m pretty sure that forming a co-op isn’t on the curriculum of 99% of business schools. As Martin Parker, the author of this long article points out, after teaching in ‘B-schools’ for 20 years, ethical practices are covered almost reluctantly.

The problem is that business ethics and corporate social responsibility are subjects used as window dressing in the marketing of the business school, and as a fig leaf to cover the conscience of B-school deans – as if talking about ethics and responsibility were the same as doing something about it. They almost never systematically address the simple idea that since current social and economic relations produce the problems that ethics and corporate social responsibility courses treat as subjects to be studied, it is those social and economic relations that need to be changed.

So my advice to someone who’s thinking of doing an MBA? Don’t bother. You’re not going to be learning things that make the world a better place. Save your money and do something more worthwhile. If you want to study something useful, try researching different ways of structuring organistions — perhaps starting by using this page as a portal to a Wikipedia rabbithole?

Source: The Guardian (via Harold Jarche)