Monday, April 9, 2012

The new Cooperative

The current state of our economic system or as some people says the failure of capitalism, calls for us to think of new alternative economic models. Perhaps that's why the UN has called the year 2012 the year of the cooperative.

Egoism, greed and dubious incentives is making money flow away from cooperations and companies and into the pockets of management, shareholders and hedgefonds. Really to make cooperations and companies sustainable and profitable in the long run, revenues need to stay inside the company, it needs to be used for investments that will benefit the future of the company. So it's quite clear by now that many of us have concluded that the model is outdated, malfunctioning and needs renewal.

The big question is; is the cooperative a good alternative? And if yes, do we then simply mean the early capitalistic kind of cooperative that farmers used to unite and fund bigger projects in the 19th century? Do we mean the cooperative that family owned businesses often get close to? Do we mean the kind of cooperative that has evolved from the FlowerPowers generation's attempts to build equality, fairness, eco and non-profit into their businesses? Or is there a new kind of cooperative possible in our times, with the means and enablers that we have now?

Young creatives are experimenting with alternative ways of funding their creations to stay independent from monetary driven interest.

The band WuLyf has deliberately started a non-for-profit foundation where people can sign-up for a small fee and become members. Being a member will give them certain privileges such as sneak-preview access to new music and possibly influence through voting or opinion in selecting the music that will make it to final release.
Wu Lyf membership page

This is actually not too different to how International Film Festival Rotterdam, IFFR is trying to survive the current austere cultural sponsoring policy. They are asking people to become friends of the IFFR. For a modest sum you will get privileges of first-buy option and reduction on activities through the year.
IFFR zoekt vrienden

Groupon could be said to be a kind of cooperative, it harnesses the power of the crowd to buy in bulk and get reductions.

Young start-ups now have plenty of opportunity through social media and crowd-funding websites like Sellaband, Kickstarter and Tenpages to plea their idea and get connected to sponsors, which may very well be individuals and not big investors.

So did Liamolly raise money for a knitting machine to bring manufacturing back to US on Kickstarter, the Obama administration could be very pleased.
Also Fabienne placed the call on her site for people to buy her limited edition knitted bottle cooler, so that she could buy a more advanced knitting machine from the revenue.

So is this the New Cooperative? then it's a decentralized peer-to-peer model where individuals make a micro-investment against a value exchange that is often consisting of a one-off product, a privilege. And friendship. The persuasive power of the pitcher is very important, his/her offer needs to really stand out and be different to catch enough interest and attention to get sponsored. Of course social media can be used to spin it.

With some creativity and perserverance it might be able to bring back manufacturing back to areas that have lost it (Europe, Richmond, Detroit etc). I would like to think of that as a new kind of manufacturing, more sophisticated, new tools and coding, small-scale and made-to-order.

Is this the new Cooperative?

1 comment:

  1. Great post Hanne. You aren't alone in spotting this trend - in large part driven by social media combined with the increasingly naked greed of old school corporations, and the growing awareness that this greed is causing real lasting damage to our societies, cultures and communities.
    If we are seeing the creation of a new cooperative culture - and I believe that we are - we need to be clear about what it is and more importantly what it isn't. For example, you mention in your post that Groupon could be considered to be a kind of cooperative. I disagree totally on this one. Groupon is a private enterprise focussed on making returns for its investors: it is choosing to try to do that (and not doing it very well I might add) by adopting an approach that might look like cooperation, but is merely exploiting a part of the power of the cooperative model. Real cooperation is about people coming together to meet their needs in an equitable manner.
    If this new cooperation is to succeed, as wel it might, clarity about the ground rules, and thereby avoiding exploitation, is critical.


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