Tag: co-ops

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I’d like to see meritocracy consigned to the dustbin of history as an outdated approach to society.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.

[…]

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)

First tea, then revolution

I’m working with Outlandish this week, as part of a MoodleNet design sprint. One of their co-founders, Harry Robbins, is quoted in the latest issue of WIRED about the CoTech network of which Outlandish (and We Are Open), are part.

CoTech is just one example of how cooperatively-owned tech businesses look poised to proliferate in the UK. Their network boasts 32 member-businesses across the country. They’re boosted, too, by the recent launch of startup accelerator Unfound, the UK’s first accelerator for tech co-ops, which announced its first successful candidates last week. If they succeed, they will be following the lead of countries like Spain and Italy, where cooperative enterprise has flourished for decades. Their proponents see business structures as driving radical change: getting the fruits of innovation shared more fairly and providing better social responsibility. Funding troubles have often stunted co-ops’ growth though – but, with tentative links to blockchain technology and a newfound spirit of collaboration, that’s something that could now change.

It takes a while to get collaboration between different organisations off the ground, and CoTech has been no different. I really enjoyed the CoTech gathering at Wortley Hall (a worker-owned stately home) last year, but we’ve more work to do.

CoTech’s 32 member-businesses have around 300 workers between them, with trades that range from web development to broadband infrastructure and augmented reality. The three biggest, among them Outlandish, boast turnovers of between £1 and £2 million. They’re yet to implement the equal pay suggested at their first meet-up, but they have made progress in efforts at collaboration. They now hold inter-coop training, monthly meet-ups to hold discussions and share skills, and run internal crowdfunding using the Cobudget tool (developed by New Zealand social enterprise network Enspiral).

It’s only when you set up a co-op or something other than a straight-up limited company that you see the default ‘operating system’ of 21st society: capitalism. And not just warm fuzzy capitalism, but rapacious, neoliberal capitalism that sets out to deprive normal, everyday people of money, rights, and dignity.

Robbins argues that being a co-op creates a different set of incentives: with no shareholders demanding dividends, generating profit isn’t the primary goal. And with it not being a quick or easy way to get rich, they’re more likely to be founded with a purpose that’s socially- or ethically-minded.

He sees big openings for CoTech to grow in both their member businesses and their respective staff – and thinks a lot of the UK’s small businesses are already effectively operating as co-ops. In an overheated market for developers, he believes that a big proportion of them want to work for companies that are socially responsible, but don’t want to do the repetitive web maintenance on offer at many charities.

It’s great to see CoTech continue to get mainstream press. Interestingly, and as you can see from the photo of the Rochdale pioneers that accompany both this post and the WIRED article, traditional co-ops weren’t necessarily any more diverse than their mainstream counterparts. That’s something that modern co-ops are actually really quite good at: diversity and democratic processes.

Source: WIRED

The increase in worker-owned co-ops

This article by Eillie Anzilotti is a Fast Company ‘long read’. It’s US-focused and includes specific examples and case studies, but is, I think, more widely-applicable.

Anzilotti explains some of the benefits of worker-owned co-ops, which are increasing in number as the ‘baby boomer’ generation retires.

Because the people doing the work for the company are also the ones who own the company, they feel a greater sense of responsibility for and personal stake in helping the business succeed. While there’s still a lot of knowledge-sharing that needs to happen before co-ops go mainstream, recently, policymakers are taking notice of the benefits of worker cooperatives, and new legislation is on the way support their growth. And with millions of baby boomer-owned businesses set to change hands in the upcoming decades, this transition could be an opportunity to create more democratic workplaces across the country–if business owners, workers, and advocates can work together to convert these enterprises into employee-owned cooperatives.

Hilariously, Anzilotti calls the retirement of the boomer generation a ‘silver tsunami’ which, more seriously, provides a huge opportunity to wrest back control from organisations that exist for the benefit of the few.

But instead of selling to a private owner, there’s a real opportunity amid this “silver tsunami” to radically scale the presence of worker-owned cooperatives in the U.S. “Historically, co-ops do best when there’s a market failure,” says Melissa Hoover, founding executive director of DAWI. During the Great Depression, for instance, farmers struggling to access energy resources, set up electrical cooperatives that they collectively owned, and cooperative housing models took off in some cities. Nearly a century later, we’re living through our own version of market failure. As banks have consolidated, capital for small businesses has grown scarce. More small businesses are now closing than opening in the U.S., and jobs are consistently failing to provide livable wages to employees.

Small businesses are vital in the economy, but to really make a change, we need larger, stronger businesses. Worker-owned co-ops can do that.

Employee-owned cooperatives… create a stronger base from which a business can continue to exist, and even grow. The workers already have demonstrated their commitment to the company and the community in which it operates, and granting them ownership allows the business to continue to operate and the community to continue to reap the benefits. And because the sales are done in a way that’s transparent and mutually beneficial, the selling business owners also get a fairer shake.

The difficulty, as Anzilotti notes, is that talking about democratic control of the organisation for which you work isn’t necessarily the most scintillating topic of conversation.

“Co-ops are not whiz-bang businesses that are going to get anybody rich,” Hoover says. “They’re bread and butter types–necessary and profitable, but not sexy.” Still, communities and policymakers alike are recognizing that their shared ownership structure can provide the kind of stability that the market cannot. “We’ve seen growing interest in rapidly changing cities and in rural areas where they’re really trying to make capital investments that anchor community wealth,” Hoover says. “Business retention makes more sense than trying to attract Amazon HQ2,” she adds. “Why don’t we invest in our local ecosystem and retain what’s already here?”

I have to say that the process of setting up We Are Open Co-op has been one of the most eye-opening experiences of my life. I’d highly recommend looking into the co-operatives for your organisation, whether extant or nascent.

Source: Fast Company