by Nathan Schneider
June 29, 2016
Capitalism loves a good crisis. It produces crises plentifully; it takes advantage of them gleefully. A crisis is an opportunity to throw pesky rules out the window—like workers’ rights or environmental responsibility—and carry out some brutal structural adjustment for the sake of capital.
Can the co-op movement take advantage of crisis, too? Often, it has. The Great Depression, for instance, was a time when the U.S. government actively pursued cooperative development, establishing rural electric companies and farmer co-ops, in order to provide services where the capital markets had failed. After Argentina’s economy collapsed in 2001, workers occupied their factories and kept them running (which Naomi Klein reported on before her landmark book on disaster capitalism). And we don’t have to wait for disasters of that scale; capital fails at all sorts of things all the time—especially Internet startups, of which about 90 percent fail. This, I think, presents an opportunity for platform cooperativism.
There are two basic strategies for cooperative development, which seem to me to be also the two basic strategies for platform cooperativism:
Startups: Companies that are born as cooperatives, with cooperative principles deep in their DNA, growing and evolving through democratic processes
Conversions: Companies that begin in non-cooperative forms, and that transition to cooperative ownership, governance, and culture by desire or necessity
We tend to put a lot of our attention on startups, because startups are kind of glamorous, and they can seem more pure in their cooperative commitments. But conversions may actually turn out to be a more promising path for platform cooperativism. Some conversions happen because the company’s owners think it’s a noble idea, and others because it fits well with the company’s business model. For platforms that have already had some success, conversion means that a broad stakeholder community doesn’t have to share the high risk of the startup stage; once the platform takes off a bit, it can switch to a more appropriate stakeholder structure. And this approach can be aided by keeping an eye out for crisis.
I’ve sometimes advocated that we should try cooperativizing the huge platforms like Facebook and Uber and Google, which have become public utilities and have no business being investor-owned. But doing so without simply confiscating a lot of capitalist property would be hugely expensive, possibly impossible. Much more plausible would be to attempt a conversion of a platform that capitalism has failed—that is rapidly losing value, or that hasn’t yet taken off. In some cases, co-op conversion might be precisely what a supposedly failing platform needs in order to solidify its user community, attract patient investment, and thrive.
In the past, declining tech companies—like Netscape-turned-Mozilla—have opted for an afterlife as foundation-directed, open-source projects; can we instead resurrect them as co-ops?
In order to do so, we need infrastructure—anti-private equity for platform cooperativism. Organizations like the National Center for Employee Ownership already specialize in converting existing businesses to more democratic ownership structures, and turning capitalist failures into democratic successes. This process involves financing, technical assistance, consulting, and culture. We need organizations with the special skills needed to do this work in tech, that have the tools to create successful turnarounds and the know-how to look for opportunity in the tech industry’s plentiful emergency rooms.
What’s already out there that we can draw from, and what needs to be created? Where do we begin?