The Rise of Multi-Stakeholder Cooperatives

November 10, 2014

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While the growth of cooperatives in a wide variety of industries is promising, the bar for social transformation needs to be, and has been, raised. As P2P Foundation founder Michel Bauwens said in a recent email conversation, multi-stakeholder coops are “where the action is.”

A multi-stakeholder cooperative (MSC) is, as the name implies, a coop that’s governed by two or more stakeholder groups. These groups can include workers, producers, consumers, owners, volunteers and community supporters. The brilliance of MSCs, also known as solidarity cooperatives, is that the various stakeholder groups throughout an enterprise have a shared vision that prioritizes equality, sustainability, and social justice.

Shareable connected with Bauwens to learn more about MSCs, their potential for social and ecological transformation, and why, facing the the peak of the extractive economy, rethinking how cooperatives do business is critically important.

Shareable: MSCs are like super coops, where producers, consumers and more are all working together. Why is this model important? What’s the most interesting aspect of it?

Michel Bauwens: Many traditional coops are for-profits that work for their members, and end up accepting the competitive logic of the neoliberal marketplace. An example that comes to mind is that Mondragon hires Polish workers at low wages to preserve its own corporate interest. So, the democratic aspects of one person, one share, one vote are certainly important, but no longer sufficient.

For us, multi-stakeholdership is part of a four-fold proposal for open cooperatives, which would involve four simultaneous changes. First, open coops should be oriented towards the common good, in their own statutes, i.e. not for profit, but profit being used to achieve the particular social goal; second, all people affected by the activity should have a say, this is the specific multi-stakeholder aspect.

These two characteristics already exist in the solidarity coop movement, especially in the delivery of social care in northern Italy (Emilia-Romagna) and Quebec, as reported by John Restakis in his excellent book, Humanizing the Economy. There are two extra requirements we suggest. One is that the new coops must co-produce commons, whether immaterial or material. The Catalan Integral Cooperative is an example of a new type of coop that only produces shared knowledge in common pool resources but it is not yet global in orientation, as the name suggests. However, its project to create a global coalition of open coops through is a step in that direction. The Allianza Solidaria housing coop in Quito is an example of a coop producing physical commons, as it reclaims the polluted ravines in South Quito, giving it back to the community.

The final requirement is a global approach, to create counter-power for a global ethical economy consisting of cooperative alliances. An example of that is the approach of Las Indias. Their coop is oriented towards the global and they have the interesting concept of phylia, i.e. a global ecosystem that sustains a community and its commons. The pieces of the puzzle are beginning to get in place, but they have as yet to find their integration in one clear example.

What kind of potential for transformation do MSCs hold, on a personal level as well as on a community level?

The problem with the capitalist market and enterprise is that it excludes negative externalities, [both] social and environmental, from its field of vision. Worker- or consumer-owned cooperatives that operate in the competitive marketplace solve work democracy issues but not the issues of externalities. Following the competitive logic and the interests of their own members only, they eventually start behaving in very similar ways.

One of the ways to integrate externalities is to integrate all affected parties in a multi-stakeholder structure, including bold moves like perhaps inviting in “representatives of nature,” who make sure ecological concerns are heard. If we would add to this mix the requirement to co-create commons, then not only would such a structure avoid negative externalities, it would produce positive externalities beyond the interests of its own membership.

Where are MSCs taking off? Is there any place in particular where they are thriving?

The field of social care in Quebec is exemplary, and Margie Mendell tells us 98 percent of the new coops are solidarity coops. John Restakis has described the situation around Bologna. Key here is that the care services are funded as a public service by the state, guaranteeing universal access, but the crafting of the process is a co-production of all stakeholders, including the patient communities and their families. Patients have a quite different vision of what they need than process oriented industrial hospitals, resulting in soaring satisfaction rates.

In the commons transition plan that was crafted for the government in Ecuador…we introduced two radical new concepts: one is public-commons partnerships, which should replace extractive forms of public-private partnerships which exclude the participation of civil society; and the other is the commonification of public services, as was done for public water in Napoli, which is now called Aqua Beni Communi, with a Commissioner for the Commons in place within the City of Naples.

MSCs require an advanced level of organization and communication, but committing to this process could prove to be revolutionary in creating vital, thriving organizations and communities. What are the biggest challenges to creating a MSC and what’s the benefit of working through these challenges?

The key issue for me is the balance between efficiency and participation; what is to be avoided is the weakness of time-consuming deliberations that end up exhausting the membership. So there needs to be trust between the various stakeholders, but once agreement is reached on the right direction, [there is] autonomy for those who have to implement it.

MSCs are about more than people making money—they’re rooted in democratic process and require a shared vision by all involved. What, would you say, is the higher purpose of these organizations?

In the old system, we have competing entities and within these entities there is cooperation. In the new system it is the opposite—everyone cooperates around shared commons, but within this cooperation, there is room for competition between various entities that build service and product models around these shared resources. In the old model, only self-interest is recognized, externalities are expelled from consideration, and “what is legal is ethical.”

In the new model, a plurality of motivations is recognized, including room for self-interest if it aligns with the common goal; and externalities are integrated in the market model. In the old model, exchange value is created for profit, and the new model, use value is generated and any profit is used to achieve that social goal.

What is the big picture vision for this movement?

The big picture is a move away from extractive forms of capital, to generative forms of capital, as defined by Marjorie Kelly in her book Owning Our Future: the Emerging Ownership Revolution. The problem is that even worker coops, like Mondragon, may end up behaving in capitalist ways on the capitalist market, without solving the grave problems that the world is facing.

With the emergence of peer production, we potentially have the hyper-exploitation of human cooperation, and generalized precarity, because the value creators, who are now often the users as well, are not getting any reward for their contributions. Worker and consumer coops, to the degree they only work for their own members, are, in my view, insufficient models to integrate the new social and environmental externalities. Thus we need new models like the open coops I call for, which includes multi-stakeholdership and the co-production of the value chain by everyone affected by a provisioning service.

Is there anything you’d like to add? What else should we know about the multi-stakeholder cooperative movement?

The key question is: Are we creating positive externalities and taking responsibility for our negative externalities? Are we not harming the common, but rather adding value to it?


Top photo by Esparta Palma (CC). Follow @CatJohnson on Twitter

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Cat Johnson

Cat Johnson is a freelance writer focused on community, the commons, sharing, collaboration and music. Publications include Utne Reader, GOOD, Yes! Magazine, Shareable, Triple Pundit and Lifehacker. She's also a musician, record store longtimer, chronic list maker, avid coworker and aspiring minimalist. Follow @CatJohnson on Twitter and Facebook

Tags: negative externalities, new economy, the commons