The way forward for cooperatives, DAOs and collectives

The way forward for cooperatives, DAOs and collectives

By Sara Campbell

Austin Robey [1] , founder of Metalabel, Ampled, and Unnamed Fund, recently discussed at Crypto, Culture, & Society the opportunities and challenges inherent in building better collectively owned and operated organizations.

As a founding member of the following three pioneering organizations, Austin Robbie is a key member of the team reimagining shared ownership and democratic governance for the digital age.

Ammpled [2] , a Patreon-like platform for musicians owned by artists and workers

Unnamed Fund [3] , a community-led, cooperatively-controlled creative ecosystem fund

Metalabel [4] , a collectively owned community network that creates knowledge, resources and tools to stimulate collective cultural output.

In his CCS talk last week, Austin highlighted what he’s learned while building in the DAO and co-op space, and some things to consider as Web3 evolves.

The way forward for cooperatives, DAOs and collectives

Cooperatives: The original collective enterprise

A cooperative (co-ops) is a business that is collectively owned by its workers, customers, or some combination of both. They operate on a one-person-one-vote basis (each member is equally represented in the vote). Cooperatives, dating back to the 18th century, are businesses that exist for the benefit of their members, not to maximize profit. In a cooperative, members = owners.

“Cooperatives are jointly owned, democratically controlled businesses that advance the economic, social and cultural interests of their members. They often emerge in times of crisis, putting people in charge of the workplaces, credit unions, grocery stores, health care and utilities they depend on. Career.” – Nathan Schneider

Some well-known examples of cooperatives: Mondragon [5] , Equal Exchange [6] , True Value Hardware [7] , Ocean Spray [8] , REI [9] , Associated Press [10] , Land O’ Lakes [11]  and SWIFT [12]

The type of cooperative in operation. workers [13] , platforms [14] , consumers [15] , procurement [16] , multi-stakeholders [17] , housing [18] , marketing [19] , producers [20] .

While cooperatives may not be the most widely known form of governance, Austin points out that they are surprisingly common. More than 12% of people are part of one of the 3 million cooperatives in the world. Additionally, one in three Americans is a member of a cooperative.

solidarity economy

Cooperatives exist within the larger context of the solidarity economy [21] , a global movement to build just and sustainable economies that put people and planet above profit and growth.

The way forward for cooperatives, DAOs and collectives

It is important to understand that many of these organizations – workers’ collectives and cooperatives, barter clubs, solidarity markets, etc. – often started out as a means of self-sufficiency, survival, or as a response to market failure.

“If no one wants to build it for us, we build it for ourselves.”

platform corporatism

Trebor Schulz coined the term “platform cooperativism” in 2014 (perhaps not coincidentally, a year before Ethereum launched). As a movement, platform cooperativism is exploring ways we can change the fabric of the internet so that all participants are fairly rewarded for their labor. It is in part a reaction to the rise of the gig economy [22] , which reversed the worker rights and protections that historically labor movements have fought for for years.

Schultz co-edited a collection of essays titled Our Cracking and Owning: The Rise of Platform Corporatism, the Future of Work, and a New Vision for a Fairer Internet [23] , saying that platform corporatism ” Put workers, owners, communities and cities in a solidarity that leads to political power.”

Some examples of organizations operating in this area include Stocksy United [24] , The Drivers Cooperative [25] , groupmuse [26] , Ampled [27] , Resonate [28] , Guilded Freelancer Cooperative [29]  and Savvy Cooperative [30] .

What can DAOs learn from cooperatives?

 Austin recently wrote an article [32] for Friends with Benefits [31] on what he learned from his work in the platform corporatism movement and the DAO field. The diagram below illustrates the basic difference between a cooperative and a DAO.

The way forward for cooperatives, DAOs and collectives

Figure from “What Cooperatives and DAOs Can Learn from Each Other”

Austin points out that the difference between DAOs and cooperatives mostly comes down to governance, but it’s mostly down to culture rather than structure. Participants must agree on a common definition of ownership.

Some examples of ownership definitions include:

Financial rights:  Profits (dividends/share buybacks), equity/book value, financial access and transparency.

Decision rights:  investment in strategy, hiring, budget, board representation, accountability to leadership.

“The economy of ownership doesn’t always mean a literal distribution of tokens, stock options or equity. Rather, it means that ownership — which might manifest itself in new economic rewards, platform governance, or new forms of social capital — can become a user experience The new cornerstone of , there is a lot of design space to explore.” — Jesse Walden [33] , Variant Fund

“Owning is like eating.” – Cory Rosen, Director, National Center for Employee Ownership

Austin suggested that DAOs have an opportunity to define more ambitiously what constitutes ownership. Saying that the novel economic reward on a platform is ownership is dangerous, he points out, because it ignores some key tenets of decision-making power and could end up diluting actual ownership in some way.

In a recent  article for Forefront [34] , “Approaches to Improving the Economy of Ownership” [35] , Austin lays out some ideas on how DAOs can better capture and communicate the intangible value of a community. He said the need for two-way accountability, where leaders are also accountable to members, upended traditional hierarchies that stressed members were accountable to leaders.

The way forward for cooperatives, DAOs and collectives

The way forward for cooperatives, DAOs and collectives

historical context matters

Austin noted that, in addition to ensuring better decision-making, an understanding of the DAO’s historical context is also helpful. There are many examples of collective organization and coordination throughout history that we can draw from. This is notable because there is a tendency in the tech world to see things as technical problems that require technical solutions, when in reality they go far beyond that.

For example, some examples include:

Economic coordination: mutual aid societies, solidarity networks, barter networks

Collective ownership: cooperatives, stewardship, community trust collectives

Decision-making and group culture: cooperative charters, mutual aid actions, group decision-making pedagogy

Community and local currency. Ithaca Hours, Berkshares, Brixton Pounds

Austin recommends Jessica Gordon Nembhard’s book Collective Courage [36] , which examines the history of black cooperatives and their role in the movement for civil rights and economic equality. status.

Fewer memes, more meaning

The cooperative culture was formed primarily to help the oppressed or economically disadvantaged meet each other’s basic needs. This is notable because of the disconnect between the cooperative movement’s historical roots and how it currently manifests in the tech world, while whimsical projects like the Constitutional DAO get a lot of attention.

It’s important to remember that the type of coordination platforms and mechanisms we’re building have the power to meaningfully change people’s lives for the better.

Common Criticisms About Co-ops

Austin points out that, contrary to popular understanding, co-ops do not mean that all members have a say in all decisions. Cooperatives often have a framework that guides their decision-making,  as illustrated by the framework of Ample [37] . A common criticism of cooperatives is that they are slow because of the need to build consensus, which is not always the case. With mutually agreed procedures and frameworks, decision-making can happen as quickly as in a traditional hierarchical organization.

It is also worth noting that the history of cooperatives may have been underexplored due to their historical links to anti-capitalist enterprise. For example, the literature on cooperatives is lacking, and courses on collective organization and ownership are almost non-existent in business schools.

One reason for optimism about the potential for cooperatives to proliferate is that the mechanisms of the Internet make the knowledge needed to establish and operate cooperatives more readily available, and their benefits more easily disseminated and publicized.

What cooperatives can learn from DAOs

Starting a cooperative involves all the risks associated with traditional entrepreneurship, but no financial benefits. Challenges include:

Difficulty raising funds

Difficult to start because it requires considerable effort

Huge information gap on how they work

Lack of professional resources and services to support

Financial incentives are unclear

The challenge for cooperatives is to ensure that the diverse values ​​of their members are accurately represented and maintained, while also maintaining operational efficiency. As a result, many successful cooperatives combine a formal hierarchy of management with the deliberate consent of members (rather than a flat, straightforward democracy). ” — Jesse Walden in Past, Present, Future: From Cooperatives to Crypto Networks [38] .

Austin, however, counters the idea that top-down hierarchies are needed to create great products or run an organization effectively, noting that it can be a cognitive problem. We currently have few cultural data points on the performance of co-ops and DAOs, but this will change over time.

An example of collective rapid iteration is from PartyDAO [39] , which was able to quickly fund the creation of PartyBid [40] , a collectively owned product that allows people to pool their capital to buy NFTs as a team.

Another example of the promising development of collective organizations is the Exit Community Movement [41] , which “striving to develop alternatives to the standard model of ‘exit’ for startups. Rather than simply targeting acquisition by more established companies or public offerings, start-ups Is it possible to target ownership by a mature stakeholder community?”

An airdrop like ENS [42]  is an example of an exit community, as all participants in the network are rewarded for the value they bring to the business.

A key aspect of moving the great collective forward is convincing people that better ways of organizing are possible. There are a lot of myths about cooperatives that need to be dispelled if we are to see widespread adoption.

The future: a hybrid of cooperative and DAO models

While new models of collective organization will continue to emerge and develop, the most successful of them may include some combination of: one-person-one-vote governance, tokens as ownership, community investment, contributor liquidity, and on-chain contributions to start.

By learning from the past, and looking to the future, we can create communities that embody the best of both worlds: effective, principled, and well-resourced organizations committed to a more equitable, democratic, and collectively owned future.

References

[1] Austin Robey: https://twitter.com/austinrobey_

[2] Ampled: https://www.ampled.com/

[3] Unnamed Fund: https://unnamed.fund/

[4] Metalabel:  https://metalabel.xyz/

[5] Mondragon:  https://www.mondragon-corporation.com/en/

[6] Equal Exchange: https://shop.equalexchange.coop/

[7] True Value Hardware: https://www.truevalue.com/

[8] Ocean Spray: https://www.oceanspray.com/

[9] REI:  https://www.rei.com/

[10] Associated Press: https://www.ap.org/

[11] Land O’ Lakes: https://www.landolakesinc.com/

[12] SWIFT: https://www.swift.com/

[13] Worker:  https://en.wikipedia.org/wiki/Worker_cooperative

[14] Platform:  https://en.wikipedia.org/wiki/Platform_cooperative

[15] Consumers:  https://en.wikipedia.org/wiki/Consumers%27_co-operative

[16] Purchasing:  https://ncbaclusa.coop/resources/co-op-sectors/purchasing-co-ops/

[17] Multi-stakeholder:  https://uwcc.wisc.edu/resources/multi-stakeholder-cooperatives/

[18] Housing:  https://www.investopedia.com/articles/pf/08/housingco-op.asp

[19] Marketing:  https://en.wikipedia.org/wiki/Marketing_co-operation

[20] Producer:  https://uwcc.wisc.edu/resources/producer-cooperatives/

[21] Solidarity Economy:  https://neweconomy.net/solidarity-economy/

[22] The gig economy:  https://www.investopedia.com/terms/g/gig-economy.asp

[23] “We Hack and Own: The Rise of Platform Cooperativeism, the Future of Work, and a New Vision for a Fairer Internet”:  https://worldpece.org/sites/default/files/artifacts/media/pdf/ourstohackandown.pdf

[24] Stocksy United: https://www.stocksy.com/

[25] The Drivers Cooperative: https://drivers.coop/

[26] groupmuse: https://www.groupmuse.com/

[27] Ampled: https://www.ampled.com/

[28] Resonate: https://resonate.is/

[29] Guilded Freelancer Cooperative: https://www.guilded.coop/

[30] Savvy Cooperative: https://www.savvy.coop/

[31] Friends with Benefits: https://www.fwb.help/

[32] Article:  https://www.fwb.help/wip/what-co-ops-and-daos-can-learn-from-each-other

[33] Jesse Walden: https://twitter.com/jessewldn

[34] Forefront: https://forefront.market

[35] Ways to Improve the Economics of Ownership:  https://ff.mirror.xyz/ZRsr5HZMfbHOEe2lIYoWinRCI65NlvDW_QzEu1rn7As

[36] Collective Courage:  https://www.psupress.org/books/titles/978-0-271-06216-7.html

[37] Ample: https://docs.ampled.com/coop/decision-making

[38] “Past, Present, Future: From Cooperatives to Crypto Networks”:  https://a16z.com/2019/03/02/cooperatives-cryptonetworks/

[39] PartyDAO:  https://twitter.com/prtyDAO

[40] PartyBid:  https://www.partybid.app/

[41] Exit Community Movement:  https://www.colorado.edu/lab/medlab/exit-to-community#:~:text=Exit%20to%20Community%20(E2C)%20is,by%20their%20community%20of% 20stakeholders%3F

[42] ENS:  https://ens.domains/

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-way-forward-for-cooperatives-daos-and-collectives/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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