New ‘Co-operativism’ Flagged in SA

Co-operatives have been in the spotlight in South Australia, as well known peer-to-peer theorist, collaborative economy proponent, and writer Michel Bauwens spoke to a group of industry professionals, policy advisers and entrepreneurs at the Flinders New Ventures Institute.

Business Council of Co-operatives and Mutuals (BCCM) Policy Analyst, Alexandra Hordern, and Professor Bronwen Morgan, who leads the Between Activism and Enterprise research project at UNSW Law, reviewed the event for Pro Bono Australia News.

Bauwens’ work is built around the concepts of networks and caring for the commons, and lays the conceptual foundations of a production system that would serve as an alternative to industrial capitalism, which involves new ownership and governance systems.

He has been on a tour of Australia talking about the development of block-chain technologies and how different business models can be a viable alternative to the industrial capitalist system in which we currently operate.

Internationally, co-operatives provide employment for an estimated 250 million people, with 300 of the world’s largest co-operatives generating a combined annual turnover of more than $US2,360 billion in 2013, equivalent to the world’s sixth largest economy.

In Australia, the top 100 businesses that operate as co-operatives, mutuals and credit unions control a combined annual turnover of around $27.9 billion. By their very nature, co-operatives are more resilient in economic downturns, helping to keep money and jobs in local communities. Many Australians are already members of a co-op, such as a credit union.

The current co-operative landscape is dynamic and innovating quickly. What differentiates newer co-op models from the co-ops we are more familiar with? What kind of advantages do they offer, and what challenges do they create?

Bauwens spoke convincingly about the importance of co-operatives being used to get ahead of ideas, and ensure that workers and consumers have adequate access to the results of their labour. He used the examples of Uber and Airbnb, noting that these were examples of capitalist companies working out how to capitalise on the “co-operation” already going on between people in the community. Bauwens proposed that co-operatives should be developing subsidiary co-operatives, taking advantage of these technologies and people’s innate willingness to co-operate, while ensuring that working conditions remain fair and profits remain in Australia.

He spoke particularly about the need for a co-operative “incubator” and noted that people are not being taught about co-operative and mutual enterprises at university level in fields such as business, accounting and law. This was in spite of the fact that co-operatives are nine times likely to remain in operation three years after start up than the traditional start up model. This need for greater awareness and education around the sector dovetails nicely with the Business Council of Co-operatives and Mutuals’ submission to the Federal Senate Economics References Committee inquiry into the contribution of co-operative, mutual, and member-owned firms, in which the BCCM highlighted this knowledge gap and proposed ways this could be addressed in the future.

Bauwens highlighted some of the exciting co-operatives developing internationally, including Italy’s Emilia-Romagna region, and New Zealand’s Enspiral. In Australia we are seeing the growth in co-operatives in the areas of aged care, disability services and education, the arts, wholefoods, and renewable energy. 

These are excellent examples of “modern” co-operatives that are enterprising and commercially focused, while retaining the aim of ensuring fairness and equality for members. They provide more secure livelihoods of purposeful work to their members, in an era of increasingly precarious employment.

Bauwens’ tour also included workshops in Melbourne and Sydney with local social enterprises, where he and participants debated ways to design commons-based governance into a range of different legal entity structures, including but not only cooperatives.

In the Sydney workshop, Janelle Orsi, a sharing economy lawyer from California, joined the discussions through a webinar. Orsi proposed a number of steps that can bring commons-based governance to life in legal terms. She drew these from an appreciation of Elinor Ostrom's design principles for common pool resource management principles but stressed that they were complementary to that work – more in the nature of by-laws than “soft” governance processes.

Orsi argued that these steps are important in insulating commons-based initiatives from future changes that would dilute their commitment to cooperative and collaborative values. The steps included ways of insulating the enterprise from market forces, placing limits on excessive compensation, building worker trusteeship into internal entity governance, designing polycentric forms of internal governance and ensuring that resources on which the entity depends are also managed as commons (for example, land that is an input to the enterprise can be structured as a community land trust).

Participants who attended the workshops ranged widely from people who had set up community garden initiatives to others who had created “makerspaces” where 3D printer experts collaborated with people with disabilities to create “assistive tech”. These examples of the spirit of “new cooperativism”, and the sense that many initiatives cross national borders with their use of digital technology, led at the end of the workshop to a stimulating discussion on whether it could be helpful in due course to develop international arbitration procedures for commons-based initiatives.

About the authors: Alexandra Hordern is the Policy Analyst at Business Council of Co-operatives and Mutuals, and Professor Bronwen Morgan, who leads the Between Activism and Enterprise research project at UNSW Law.