This is Part 2 of a series of 4 articles about new tools being developed to help build the commons. Part 1 was about how I discovered these tools, and why they excited me. This article is about how they protect the commons from co-option, purchase or cancellation.
Coming soon:
- Part 3: building a strong movement.
- Part 4: what a commons town might look like.
We’re having ongoing discussions about new commons models being piloted in Stroud, Liverpool and elsewhere. If you have any knowledge of the topics covered below, we’d love to hear from you. This article is to answer some of the questions we get, such as: ‘What’s different about the commons movement? What are you bringing to the party that we don’t have already? Why should I give it my time when there are so many other things I could be doing? How will these models help build a powerful movement? If you’re successful, won’t the state just close you down?’
When our commons movement is providing secure tenancies in community-owned housing; affordable, sustainable utilities; reliable and secure ways for people to invest in their local community, with a reasonable return; ways for small businesses to save money; and jobs in the local economy, the answers should be clearer. The benefits will speak for themselves and attract people to the movement. We already have a waiting list for potential housing commons tenants.
But this movement aims to help build a different system, not just to make a few tweaks to this one to make it more bearable. If successful, obviously there will be entities out there that will try to undermine it, buy it and ultimately, to crush it. We think the new tools mentioned in Part 1 will make it more resistant to this threat than existing models.
Existing co-operative models aren’t challenging the status quo
Co-ops and mutuals are great. When the pioneers were building the first co-operatives and building societies in the 19th century, they must have believed that they were planting the seeds of a new system. The world had never seen anything like it. And they were successful – very successful! There are now over 3 million co-ops in the world, with 1.2 billion members and 280 million employees. Beyond the wildest dreams of the pioneers, I imagine.
But can we honestly say that they’re challenging the status quo? Not really – and they’re now being slowly absorbed into capitalism. The Co-op Bank is no longer a co-op. It’s owned by various hedge funds and asset management companies [since writing this, the Co-op Bank has been brought back into mutual ownership by Coventry Building Society] . Although Co-op Energy is still owned by Midcounties Co-op, its energy supply, billing and customer support are managed by Octopus Energy. And more than half of (originally mutual) building societies have been bought by the banking sector. The situation is similar with (mutual) savings & loans companies in the US.
Why is this the case? Clearly, asset locks aren’t strong enough, if they’re not able to prevent corporate buyouts. But also:
- They often go into debt to bring infrastructure into co-operative ownership; for example, to buy housing stock, housing co-ops often get mortgages from, go into debt with and pay compound interest to corporate financial institutions – the kinds of institutions that co-ops were designed to replace.
- They use the bank-issued money system, for sales, rents, wages and purchasing; but that money is the thing that’s constantly sucked out of communities and concentrated in the corporate sector and financial havens.
- Community shares aren’t attractive enough to (most) investors, as they’re non-tradable, usually capped, don’t appreciate in value, and are not usually secured against assets, so they’re more risky.
- Co-operative projects don’t effectively federate with different economic sectors or geographical areas – they’re relatively isolated co-operative islands in an ocean of corporate capitalism. Principle 6 of the International Co-operative Principles is co-operation between co-operatives, which has happened, but (apart from in places like the Basque Country and Emilia Romagna) not to the extent of federation to present a realistic systemic alternative.
Other issues with co-operative / community-based institutions that hold them back and potentially make them vulnerable:
- The infrastructure / assets aren’t owned by the community, but by a business (albeit a co-operative one).
- Charities and community land trusts (CLTs), for example, don’t allow for paid directors or trustees, but if we can’t pay people to manage schemes, then only well-off people can be in charge.
- Trustees are often personally liable for any debts – so if the membership wanted to do something risky or radical, they could stop it. They could decide to bring in accountants or lawyers to provide advice, and as accountants and lawyers are not famous for being particularly radical, they might advise against it, and the trustees might well agree. Ultimately, directors and trustees are in charge, and if they decide to go against commons / co-operative principles, the courts would allow it.
- Co-ops are often seen as going against established economic interests. Governments can make things difficult for co-ops, and can ultimately close them down. Legal recognition didn’t come easily at first, and still today in some countries it’s much more difficult to form co-ops than in others.
- The laws around co-operative models are constantly changing. CLTs were brought into existence with an act of parliament, and it would be really simple to get rid of them by changing the law – but of course there’s no incentive to get rid of them, as they’re too tiny to challenge the status quo.
Why new commons models are more difficult to co-opt or cancel
The state also managed to snuff out the ‘friendly societies’ that were huge at the beginning of the 20th century, and as they were more like commons institutions I guess, that seems to go against my main argument here. But that happened at a time when Western governments were very afraid of communist revolutions, and were eager to provide public health and social care that was free at the point of use, to dampen any revolutionary enthusiasm. We’re in a very different place now – states don’t see any challenge from the left, and consequently, the NHS and social care provision is crumbling.
Here are the main ways that I believe the new commons models will be much more difficult to co-opt:
- If commons groups can buy land / houses etc. not by borrowing or selling shares, but via other routes, including future-use vouchers (use-credit obligations), they can be debt-free, which can reduce risk and increase returns for investors.
- Eventually, they won’t need to use bank-issued money either. Credit clearing schemes can reduce the need for money enormously, and then mutual credit networks can start to remove it altogether. Apps are being developed that will enable vouchers to be bought, some wages to be paid and local goods to be purchased within a mutual credit environment, rather than with bank-issued, debt-based money that can be extracted from communities and concentrated in distant financial havens.
- Very strong asset locks can be provided via a custodian member class – trusted locals with a track record of community-building, that have a passive veto vote, to make sure that groups do nothing that makes them vulnerable or that violates commons principles, like taking on debt, or selling assets out of the commons.
- The Credit Commons Protocol (and potentially, sociocratic decision-making) will allow local commons groups to federate, in terms of trade and governance, with different sectors and different towns, to present a united front and the basis of a new economy.
- Stewards / managers of schemes can be paid for their work, which means that the role will be available to anyone, not just the better-off, who don’t need to be paid.
- Basic legal forms – the essential building blocks of our modern legal system – can be used that would be difficult for governments to cancel without disrupting millions of ordinary businesses.
When it’s really growing, the new commons movement can prevent capitalists from ever buying our assets again; it can avoid debt and compound interest with the banking system; it can start to avoid money, interest and payment card fees altogether; it can connect sectors and towns into federations; and it can provide savings and pensions for people within their communities, without having anything to do with the financial sector. Plus it’s a model in which the community owns and controls everything. Customers and employees of commons, and people who have their pensions and savings with the commons are all members / commoners, with equal control. This could end up being the majority of people within a community.
But we need to build in a solid way that can’t be undermined / bought / crushed (we can never guarantee that this won’t happen, but we can start in ways that make it more difficult). The problem is setting something up that’s democratic, without allowing a democratic vote to be highjacked for selling assets out of the commons, or for groups to demutualise, like the building societies.
Credit clearing works – banks and financial institutions have been doing it among themselves for hundreds of years. Mutual credit works – there’s an international commercial mutual credit trade association that oversees global trade in mutual credit worth $14 billion annually. The Credit Commons Protocol works – it’s been tested by linking lots of LETS schemes and timebanks in various countries. The future-use voucher idea is being trialled by Island Power in the Pacific, but in Stroud we’ll be pioneers in the UK with this.
A powerful commons movement is long overdue
If we’re looking for a movement that can challenge the status quo, then nothing that currently exists is going to do it. Capitalists can sleep easily, knowing that all current challenges can be safely ignored, and if needs be, co-opted, bought or crushed. Something’s missing.
I believe that the core of this new movement will be the commons, based on Elinor Ostrom’s 8 commons principles. But I think we can simplify them by boiling them down to three:
- Resources / assets are not owned privately, but it’s not a free-for-all either. There are boundaries and agreements so that all users (commoners) know what’s expected of them, and what they can expect to get from the commons, whether it’s housing, energy, food, water, social care, or anything else.
- Commoners make and monitor the agreements themselves – they’re not imposed from above.
- The commons is a movement – each local commons fits into a larger commons, and so on, up to the global scale.
The first negates Hardin’s ‘Tragedy of the Commons’. The second shows that this is separate from the state. The third makes the ambition clear. The rest is detail.
So to recap, new tools are now being designed that can potentially help deliver:
- infrastructure without debt or dependence on traditional finance
- trade without bank money
- robust, multi-layered asset locks
- resilience against sale, co-option or cancellation
- permanent community ownership
- democratic decision-making
- federation for cooperation / coordination at scale while preserving local autonomy
The whole range of existing co-operative institutions will be part of this movement too. I’d choose a co-op or a mutual over a corporation every time (and I do), but co-ops can’t be considered the basis of a new system any more – at least not on their own. And seizing power by force is a fading pipe-dream (as well as a bad idea).
But we absolutely have to collaborate and connect. There aren’t enough of us not to. It’s not about trying to get a bigger slice of the pie for one section of society. It’s about baking a new pie.
Calling activists / volunteers
Right now, we need to attract activists / volunteers to build commons institutions, promote, network, research, develop websites, start groups in their towns, and brainstorm. So this series is for potential activists, who see that the global economy is run by corporate entities that are literally inhuman, with policies that are therefore also inhuman – concerned with share price, money & profit, rather than human and environmental well-being.
Over the years, I’ve attracted people into the commons movement, who are now involved full-time in exciting projects in the UK and elsewhere (like this, this, this and this). I know it works – so this is my latest attempt. We’re going to offer everything we learn to anyone who wants to try them. Almost everyone responds well to the concept of the commons.
Go here if you’re interested in getting involved.
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