Blowdown!

I have recently rediscovered the work of Margaret Wheatley and the Berkana Institute, which seek to help people organize in ways that mimic rather than oppose living systems. (In an unusual adherence to principle, the institute is currently resting.)

I’ve been particularly struck by something they call the “lifecycle of emergence,” which describes “how living systems begin as networks, shift to intentional communities of practice, and evolve into powerful systems capable of global influence.”

Along similar lines, we have much to learn from the structure of a forest. I believe I’ve started to learn these lessons from my own time in the woods, but first reading Wheatley’s work a half-decade ago may have influenced me to the point that I subconsciously plagiarized some of the following while applying it to economic organizations.

In any case, Wheatley deserves much foundational credit for my understanding of how our current economic and social systems resemble a mature forest, as well as what that teaches us about the cataclysmic changes that are now underway from the individual up to the global level.

First, some forest background:

Forests do not simply pop into existence. They develop through a process called ecological succession, through which open space (such as a grassland) becomes a mature forest. In the case of bare earth exposed by a retreating glacier, there is initially a scarcity of materials with which to gain nourishment, and lichens are usually the only beings that can eke out an existence with the water, sunlight and bare rock.

But these minute organisms break down the rock and process it into soil, which gathers in cracks until it is sufficient to support mosses and small plants, which attract small animals. These animals occasionally leave their waste products, and further build the nutrient base. Shrubs and small trees move in.

The first trees are generally fast-growing broadleaf trees like alders and maples. These trees build the biomass that will sustain what is known as a climax forest, sheltering the more shade-tolerant conifer seedlings that take much longer to grow than broadleaf trees but eventually crowd out their predecessors.

At climax, the forest has essentially reached maturity as a system. While individual trees come and go, the makeup of the forest then remains relatively stable and can remain so for centuries. The forest becomes a two-tiered place, in which the canopy blocks out the sun while the forest floor becomes an open place with most nutrients locked into tree trunks, sparsely populated by ferns and small shrubs.

Compare this to how giant banks are now hoarding capital while small businesses are unable to secure loans.

Climax forests are sometimes likened to cathedrals. And, like cathedrals, they are relatively quiet places. Most of the time. However, climax forests do not live forever. Their stability yields to stagnation. The average age of the trees increases, and diversity decreases until sometimes a forest canopy will consist of a nearly homogenous stretch of one species, stretching for miles.

This forest becomes increasingly vulnerable, and eventually it collapses. The trigger can come from fire or beetle infestations, but often these weakened forests are simply brought down by wind.

When trees fall, they often fall in clusters. This may be the simple result of one tree’s pushing over others on its way to the ground. The new opening in the canopy then allows the wind to drop down and catch the other trees that were previously protected by each other. In extreme cases this is known as blowdown. And here’s where we come in: Our economy is ready for a big renewal, but old things must fall first.

On occasion, blowdown turns into a chain reaction, transforming many acres of tranquil old-growth forest into a cataclysmic jumble of trunks and branches. At first glance, this looks like a horrible mess. And from the point of view of the trees, that’s just what it is.

However, the collapse of one order paves the way for another, as the cycle starts anew.

Sometime around when I discovered Wheatley’s writing, a huge Douglas fir went down in a forested park near where I lived. It took about a half dozen smaller trees with it. When I discovered it in the spring, this new clearing was already home to a riot of new growth. The old trees were still bleeding sap, but already the forest floor was covered with a thick growth of nettles and elderberry, taking full advantage of the sunlight’s return.

Once again, the land was a place for rapid growth and flexibility. And as the years pass, the old trees that fell will decompose and release the nutrients that they hoarded for so many years. Once again, flexibility and vitality will be important assets until the climax forest returns. I’ll write more on this in my next post.

The development of human civilization has tended to follow a similar path. In exploring these parallels, it is helpful to view individual forest organisms as analogs to human organizations. This analogy applies equally well to everything from a single individual’s career or household’s finance, up through independent businesses (including co-ops!) and associations, to nations and international bodies. For example, it is not hard to see the parallel between half-fallen trees and the Eurozone, where the walking wounded hold each other up but their fate is more or less sealed.

At first the new system’s progression favors small and aggressive entities, which can adapt to changing conditions. These pioneers put a premium on rapid rates of reproduction. They fail often, and when they do, they are rapidly reprocessed to serve the next generation, adding to the soil base on which the system depends.

These pioneers have parallels in the simplest organizations. Their structures are simple, their size is small, and they do not have much specialization among their parts. Over time, more complex structures evolve and because of their complexity they are able to crowd out their predecessors. Smaller, simpler structures are broken down and integrated into their replacements, much like how local businesses have been absorbed by chains.

Height is an important part of the succession, and something like it functions among organizations. This is not literal height, although the physical structures created by organizations often reflect their relationship to the world. Rather, it is marked by variations in rank and compensation.

In the same way that a tree’s crown needs a lot of trunk to hold it high enough to catch the sun, many workers are required to elevate the management to the heights that give it an advantage over its competitors. The lower parts may benefit from being part of the structure, but on the whole a huge amount of inert material is required to facilitate a relatively small amount of vitality and growth.

A 100-foot tree and a huge corporation have an important quality in common: They are not going anywhere. These giants do well in times of basic stability, or at least change that is linear and constant. But as soon as turbulence strikes—whether gusting wind or political upheaval—they turn out to be much weaker than they appeared.

The Apocalypse as a Fluff Story

I go through life with a pretty solid sense that our economy is screwed up. And I know that the press is too deeply entangled to get a clear view of things. Even so, once in a while I have a moment of clarity about how deep the rabbit hole goes. For example, Thursday’s Washington Post featured a weird convergence of stories that highlighted the fantasy that we are in an economic “recovery.”

The front cover featured a photo of the Apocalypse, which is a new roller coaster at the nearby Six Flags amusement park, which is recovering from a 2009 bankruptcy; I guess this is supposed to be a sign of recovery from the financial crisis. Some workers were employed in its assembly, although the cars were made in Switzerland and the actual structure was recycled from a park in Illinois. A few teenaged or delayed-retirement service workers will be needed to attend this new spectacle. An engineer will be needed to occasionally inspect and maintain it. And from the looks of the “apocalyptic” fireball, the thing is going to go through a lot of propane, perhaps creating work for a commercial driver.

Woohoo! Jobs!

Elsewhere in the paper, I learned that Exxon Mobil is showing its thanks to suburban Fairfax County by pulling 2,100 jobs to a new campus in Houston where the extractive giant is consolidating its workforce. Fairfax, of course, is hoping to attract another corporation to fill the 1.2 million square feet of office vacated, presumably from somewhere not sufficiently responsive to corporate blackmail.

The Apocalypse story shared its page with an advertisement for a giant new casino, featuring  picture of a woman converted into a “strolling dessert table!” – oh, wait, I was wrong…that was supposed to be reporting.

There was also a more subdued story about how it will be necessary to drop a project labor agreement in order to hopefully extend the DC subway out to Dulles airport. I’m not sure that public transportation to an airport in the face of peak oil and the resultant contraction of air travel is really productive, but I do know that we’re not going to escape the clutches of economic contraction with used roller coasters and casinos.

Our economy is hollowed out and we don’t really make anything nowadays; we only sell each other roller coaster rides and various forms of gambling ranging from nickel slots to CDOs. If you need still convincing, just think about how many people you know actually physically create things. Or consider the recent big investment buzzes: Facebook did a face-plant as folks realized that it doesn’t even create ad revenue well. Similarly, Groupon, LinkedIn and a host of other companies don’t actually make anything except profits for “investors” who actually have no real investment in how the company does.

Last week, US News and World Report ran a helpful story by David Brodwin that addressed the remarkable benefits of the John Lewis Company – England’s largest department store chain, which is entirely owned by its 81,000 employees, who live without fear of layoffs because they control the company. Brodwin flagged what looks like an interesting book by Marjorie Kelly, Owning Our Future: The Emerging Ownership Revolution:

John Lewis Partnership is part of a paradigm shift from “extractive ownership” to “generative ownership,” as Kelly explains in her book. ”Extractive ownership puts short-term financial gain above all else,” she says. “Generative ownership returns economies to their original purpose, which is to advance human well-being.” John Lewis Partnership certainly fits the generative model. Its stated purpose is the “happiness” of its staff, which results from “worthwhile and satisfying employment in a successful business.”

Kelly’s contrast between generation and extraction calls the question of whether our economy – at its core – is based on building something or looting what our parents built.

The heart of the old Copake iron works

I recently spent a week in Copake Falls, N.Y., which the site of an ironworks that closed nearly a century ago and now lingers in suspended “historical” animation as a small state park. The place triggered a lot of reflection about American industry has changed.

My reason for this trip was the East Coast planning retreat for CoFED, an inspiring young organization that I’ve been working for lately. This scrappy group specializes in supporting student organizers who seek cooperative access to more sustainable food on their campuses, by means of cafes, stores and garden projects. This gathering to scheme a part of the new economy this dying rural community was quite inspiring.

One of the more poignant moments was our visit to the Wassaic Community Farm. We spent a misty afternoon weeding and potting in a smallish plot wedged between the end of the Metro North commuter railroad and the site of Luther’s Livestock Commission Market. It was a lovely example of new growth sprouting in the cracks of the old, but I was struck by the extent to which we continue to lose infrastructure.

The railroad used to carry iron products from Copake Falls to New York but now ends at a giant park-and-ride lot a short walk away from Wassaic. Beyond that it is being repurposed for bicyling. Rail trails are nice, but it seems more important to avoid losing any more rail infrastructure. As gas prices rise, I think we’re going to find that we miss public transit more than we enjoy bike rides through the countryside.

The auction yard was more poignant still. It used to be the nerve center of the local livestock industry before it closed a decade ago. I heard that it now houses a number of artists’ studios as part of the Wassaic Project, which is better than its sitting vacant. Judging from the video on the project website, it is at least delivering bursts of economic activity to the town. That is good and I commend their success.

However, as we talk about building new local economies, we can’t afford to waste components that could be used for rebuilding local food systems. I’m not saying art is unimportant; just that it’s not an appropriate use for essential agricultural resources. It’s like using a factory for a childcare center. There’s probably no local market for cattle now, but would it be possible to return the old mill and auction yard to their original purposes if there were? Wouldn’t it be amazing for Manhattan chefs to ride the train out to buy meat, much in the way they now go to farmers markets to select the best heirloom tomatoes?

Just add cow!

I worry that well-intentioned preservation efforts may make it more difficult to bring these resources back into productive use. On the other hand, the artistic work in Wassaic is helping maintain the physical structure in a region where many old buildings are crumbling back into the earth. Perhaps the artists are buying time for the local markets to mature to the point that there are once again numerous growing dairies that can come together to trade stock. But I worry that we are losing these last chances to use old infrastructure in new ways.

Ultimately, apocalypse means “revelation” or “disclosure.” It is not about waiting in line for fireballs and carefully arranged scenes of destruction. I think events are revealing that we are at the point of making choices about how our future unfolds:

Would we rather have roller coasters or rail that actually takes us somewhere? Would we rather have art or meat? Would we rather have recreational bicycling or the means of supporting rural economies on which any hope of a local food system must rest? Do we want companies based on humane livelihoods for our neighbors, or enslavement to corporations that will drive down wages and then leave as soon as it is profitable to do so?

Ultimately, do we want an economy based on real generation or on gambling that we won’t be the next ones to be screwed?

The real apocalypse isn’t going to be like the ride at Six Flags. It will be a more quiet realization that we ultimately live in a market economy. And when we go to market, we’d better have something valuable to trade.

The DACHA Debacle

As I slowly relaunch the coopgeek blog, I find that I have  a rather large backlog of items to cover. But one item really needs some attention.So before I turn my blog into a serial for release of sections of my paper, I want to take care of some seriously overdue business. Something stinks in Davis, Calif. and it has taken me entirely too long to weigh in.

David Thompson, a Cooperative Hall of Fame inductee, writer and president of the Twin Pines Cooperative Foundation, has long been calling the cooperative movement’s attention to the alleged misdeeds of the Davis Area Cooperative Housing Association (DACHA). It’s a horribly complicated mess, but the short version is that this co-op’s board allegedly voted to liquidate the co-op in a way that violates the co-op’s bylaws (and the law), and just happens to dramatically line the pockets of said board members. Not only that, but the TCPF was apparently cut out from board meetings despite DACHA’s bylaws calling for it to have a seat on the board. Furthermore, the City of Davis appears to be in cahoots with this improper governance. It’s a real mess and to David’s credit he has been a voice crying in the wilderness.

His work seems to be bearing fruit. I am especially impressed by the list of co-op leaders who have weighed in on this matter, as listed in a recent email David sent:

Paul Hazen, President, National Cooperative Business Association, Washington DC; Rebecca Dunn, Executive Director (ED), Cooperative Fund of New England; Christina Jennings, ED, NorthCountry Cooperative Development Fund; Gerardo Espinoza, ED, Industrial Cooperative Association, LEAF Fund; Jerry Rioux, ED, San Luis Obispo Housing Trust Fund; Tracy Parent, Director, San Francisco Community Land Trust; Newell Lessell, ED, Cooperative Group, Brookline, MA; Stephanie Mandel, Education Director, Briarpatch Co-op, Nevada City, CA;

Paul Cultrera, General Manager, Sacramento Natural Foods Cooperative; Dan Firestone, Financial Manager, Equal Exchange, Bridgewater, MA; Steven Parliament, Instructor, Indianhead Technical College, Wisconsin; Frances Moore Lappe, President, Small Planet Institute, Cambridge, MA; Margaret Lund, Principle, Co-opera, former ED, NCDF, Minneapolis, MN; Paul Harton, former General Manager, Briarpatch Co-op, Nevada City, CA; Walden Swanson, Principle, CoopMetrics, Andover, MA; Paul Bradley, CEO, Resident Owned Communities USA, Concord, NH; Bill McIntyre, ED, Ohio Employee Ownership Center; Christopher Mackin, Principal, Ownership Associates, Cambridge, MA; John Restakis, ED, BC Co-operative Association, Vancouver, Canada;

Stephen L. Dawson, President, Cooperative Home Care Associates, Bronx, NYC; Ken Galdson, Director, InterValley Project, Newton, MA; David Kirkpatrick, Former Director, National Economic and Development Law Center, Berkeley, CA; Martin Barnes, Co-Founder Davis Farmers’ Market; Herbert Fisher, Former Board member, National Association of Housing Cooperatives; Ginny Vanderslice, President, Praxis Group, Philadelphia, PA; Steve Alves, Director, Food for Change, Greenfield, MA; Myrna Britton, Atty and City of Santa Cruz Planning Commissioner; Roger Anderson, Former Chair, State LAFCO Commission. (Organizations for identification only)

David has been absolutely tireless in his efforts to achieve justice here. In addition to rounding up supporters he’s also assembled a formidable page of further information including much evidence.

And just today, he sends word that this mess just got darker and seems to be moving into cover-up mode:

63% of the testimony provided to the City of Davis by Twin Pines Cooperative Foundation (TPCF), Neighborhood Partners (NP) and other parties for the DACHA Dissolution Hearing were omitted by the City Attorney from submission to the California Attorney General. The 57 documents containing 420 pages of testimony contain some of the most critical testimony relating to the DACHA board and Membership and the role of City staff. Among the 400 missing pages are all the rent rolls, all the minutes of board and membership meetings and most of the evidences of wrongdoing and alleged illegal actions by DACHA and City staff.

Now I’m not in Davis so I can’t inspect these documents myself. But this doesn’t sound like a bluff to me (he goes on to invite any takers to inspect the files) and it really doesn’t sound like a case of misinterpretation or focusing on the negative in a situation that is shades of grey.

Sure, David has a dog in the fight here and he’s not an unbiased observer. But he raises valid issues about how an organization he heads was a legit stakeholder and should have been included in the actions taken by DACHA.

I don’t know for sure what happened in Davis, and I’m not in a position to pass judgement on the city’s actions or motives. But it’s pretty clear that there’s a serious breakdown in transparency that threatens the democracy on which both the City of Davis and DACHA are based. That has to stop.

UPDATE: It has been called to my attention that the City of Davis actually does have its side of the story online, including quite a few links. The focus is primarily financial and legal, but most germane to my comments on the board is this:

Neighborhood Partners [was] appointed the initial DACHA Board because there were no DACHA co-op members to serve on the Board until prospective occupants purchased co-op shares. This original non-member DACHA Board contracted with Neighborhood Partners to provide consultant and developer services to the co-op.

This suggests that Neighborhood Partners’ seat on the board was originally intended to be temporary, as part of a solution to the chicken/egg problem of how to form an elected board to create an organization to create a co-op to attract members to elect the board.

I’m not privy to the the original bylaws or plans, but hope that someone with inside knowledge might offer their comments below.

Out of Panem

The Hunger Games is shaping up to be the start of a successful movie franchise based on Suzanne Collins’ dystopian young-adult trilogy. I am surprised that I would write about it as the much-postponed grand relaunch of my long-dormant blog – I rarely read fiction or see movies, after all. Plus this is so…trendy.

However, I see some interesting resonance with the capstone paper I just completed for the Master of Management – Co-operatives and Credit Unions. In that research I explored a challenge facing cooperative attempts at complementary currencies.

For those not yet hip to the Hunger Games, here’s the story:

Several generations after a cataclysm, famine and uprising, North America has been reduced to a remnant state called Panem. This consists of a wealthy Capitol and 13 impoverished and enslaved colonies, each of which are forced annually to provide a pair of teenaged “tributes” for a sadistic and humiliating televised fight to the death.

The heroine Katniss volunteers to compete in the annual event after her younger sister is selected, and she is swept into a tale of teenage angst over balancing her true feelings against cultural expectations. She also faces a fight to the death with her more socially acceptable romantic option and 22 other teenagers. It’s pretty weird stuff.

Not surprisingly some writers are finding Deeper Meaning in this story. There’s the obvious critique of reality TV (which has so far stuck to emotional brutality with only sporadic or cartoonish physical harm – but give it time!) There’s also a bit of analysis around dependency theory, observing the fairly clear colonial structure between the Capitol and its captive districts as well as the significant differences among the districts in how they experience their captivity. I even found one piece describing the story as a Christ metaphor - admittedly there is heavy, bready symbolism around Peeta.

I now add myself to the crowd of analysts.

As I mentioned, The Hunger Games is part of a trilogy, in which Katniss later leads an uprising against the Capitol. According to Collins’ story, there are only a few small clusters of civilization left in North America. People live inside tightly controlled districts surrounded by electric fences, and there is only minimal travel (by rail) from one district to another.

Setting aside the fact that Collins can create whatever world she likes, I don’t buy it: There’s simply no way that the entire continent could be reduced to the state she describes. More likely this is just the official propaganda taken as fact by everyone in the story. I suspect that this world would also include people entirely outside the system – utopian anarchist colonies, roving bandits, religious communes and warlords. I am also skeptical that any state could hold together with such long and exposed supply lines.

So if I’m so smart and there are bandits out there, why wouldn’t they be picking away at the rail lines, blowing up bridges and whatnot? In particular, wouldn’t my hypothetical outsiders be well aware of the potential ransom bounty or propaganda jackpot if they managed to capture/liberate a pair of tributes? Maybe. However, given that Panem is able to deploy fearsome hovercrafts and other fantastic technology, it is plausible that the state could maintain an area of scorched earth along its supply lines. It’s fiction, after all.

On the other hand, Collins’ story does hint at something outside the fences, when Katniss and Gale (her less socially acceptable romantic interest) encounter an escapee just outside of District 12. This suggests that something is going on out there; otherwise how would a young woman make it alone across the wasteland from the Rockies to Appalachia? Somebody was helping her. And after her capture she reappears as an “avox” – tongue cut out to keep her from sharing whatever she saw out there. Her secrets must be really juicy. And it later turns out that a new rebellion comes from outside the fences of Panem.

So what does all this mean for us?

We’re clearly a long way from Collins’ dreary picture – at least in the literal sense. But Panem provides a useful symbolic tale of how we might rise up and confront an economic system that is leading us all to our doom, perhaps in ways that literally resemble the story. It is not hard to imagine the natural evolution from the American gated community to District 12. Survivor differs from the Hunger Games only in degree.

If left to its own devices, the current system will keep building fences and creating spectacles. It is based on unsustainable resource depletion and increasing control, and it must be stopped. However, there are other ways to stop it beside direct confrontation. Indeed, escape seems a much better prospect than fundamental change to a system that is beyond repair.

A historical model may be found in the Basque country, home to a people who maintained their independence for longer than any other tribal group in Europe. During the 20th Century, the Basques took two major approaches to fighting their Spanish masters: On the one hand, the guerillas of ETA waged decades of insurgency. On the other hand, less-militant Basques were inspired by Catholic Social Thought and quietly built a system of cooperatives called Mondragon, which is now one of Spain’s largest and most successful enterprises, and is avoiding layoffs as the national unemployment rate approaches 25%. As the insurgency seems to have finally ended, the Basques face unemployment rate of only 11%, partly credited to Mondragon and the regional economic strength it helped build.

In my addendum to The Hunger Games, Panem is merely the largest and strongest force, but not the only social option. It occupies a connected web that sits squarely in the middle of the territory, preventing any alternatives from effectively connecting to each other or accessing the most valuable pockets of what scarce resources remain. This is not unlike the dollar-based monetary system, which is presently stitching together global hegemony, strengthening its lines of connection and simultaneously building up barriers to anything outside of itself.

And here’s where my research comes in:

I have long believed in cooperatives’ ability to provide positive alternatives in the face of oppression, as seen in the Basque Country. But I’m no longer sure if they are enough to really address our economic troubles. After all, Mondragon still pays its bills in Euros, and it is deeply dependent on the health of the Spanish, European and global economies. It might survive their collapse, but I doubt it would look the same.

Perhaps co-ops are still inside the fences of Panem, serving as pressure valves that prevent us from building the head of steam needed for real social transformation. I just don’t know anymore. However, it can’t hurt for us also to be developing other models that don’t rely on the structures of the dominant system.

My paper looks at complementary currencies like those that helped people survive the collapse of the dollar during the Great Depression, and those that are helping rebuild community today through online time banks. These online exchanges are rebuilding reciprocal economies that serve as an alternative to the anonymity of spending national currencies like the dollar. I’m coming across some really interesting material, which calls into question the economy we all take for granted at a much deeper level than I had anticipated.

I’ll be posting more from that in the near future, as I think it’s very important food for thought. Stay tuned…

Another big change

Hello all,

After a couple of years on ice, I think I’m going to dig out this blog and dust it off.

I recently departed from my position with the National Cooperative Business Association, where I edited the Cooperative Business Journal. It was a really great experience to spend time with the United States’ apex organization, but I’m also excited to detach and get back into my old world of co-op writing, development and education on an independent basis.

I’m not totally freelancing, however. I’m now the team facilitator for CoFED, which helps organize food co-ops on college campuses. This is getting me back to my roots in several ways, both in dealing with food access and also organizing collectively with the goal being democratic management. It’s been fascinating already, and definitely a cultural change from the Washington office scene (NCBA HQ is two blocks from the White House and allows jeans on Fridays – on the other hand, they don’t put folks on couches while traveling for work).

I’ll be staying in DC until probably late summer, getting more into the local scene than my previous nationally-oriented job allowed. It should be a hoot.

I’m still adjusting to my new thing, which is so far the most full-time part-time job I’ve ever had. But I trust that it will calm down and I’ll have a chance to get back to my old co-op musings. Sometimes these will be posted on my blog for faith-based cooperation, Nehemian Organizing. But since I’m no longer a communications guy, I think I’m free to let loose whenever the mood strikes. It may be a few weeks yet, but I just wanted to send out a ping and let y’all know that Coopgeek is back.

Stay tuned…

Life-changing event

I have moved from Sacramento to Washington DC, to serve as communications specialist for the National Cooperative Business Association. My primary responsibility will be coordinating and writing content for the Cooperative Business Journal (CBJ), a bimonthly print publication, as well as NCBA’s monthly “eNews.” If this seems sudden, its because it was sudden; only four weeks between applying and arriving at the office.

This new staff position will impact my availability for speaking and writing on cooperatives. Because I’ll be representing NCBA as a member of its public affairs staff, my public words will need to be in harmony with the messages put forth by NCBA. On the bright side, I’ll be involved in shaping those messages.

I am suspending my blog for the time being. It will probably return as a mirror of a blog site for NCBA once they go live with their web site redesign this spring. My speaking availability will also be managed through NCBA’s new Speaker Bureau.

Meanwhile there are nearly 180 back posts that may be browsed or searched. The blog’s history includes my extensive reflections on the economic crisis (both launched in Oct 2008), accounts of my travels to co-op hotbeds in Italy (Oct 2008) and the Basque Country and US Rust Belt (Oct-Nov 2009, my five-week national book tour (Jan-Feb 2009), and my participation in a really wild dogfight on co-ops and health care reform (all summer long). There are also some oddballs about spontaneous musicals, musical instruments, movie reviews, and paradigm shifts. Hooray for reruns!

In my absence from the blogosphere, I recommend related blogs like The Workers’ Paradise (US), Co-operatives in the Spotlight (UK), and Robb on Cooperation (NZ). The Distributist Review and Front Porch Republic also frequently address cooperative economics and are worth a visit for their sheer mass of interesting and thought-provoking discussion.

And maybe more people can start co-op blogs now. Feel free to rat out other and new co-op bloggers (including yourself) in the comments below.

This blog thing has been a whole lot of fun (and sometimes a big pain in the butt), and I will miss being able to let rip about whatever crosses my mind. However, I see this as trading in my little plastic pail and shovel for a hydraulic excavator. I have to be more careful about where I start digging, but I’ll be able to move a whole lot more dirt.

I think it’s a pretty good deal, and I’ve got no regrets. Thanks for reading, and thanks especially to those who took the time to comment.

In cooperation,

Andrew McLeod

Helping Haiti

As the disaster in Haiti enters its second week, it is time to start changing gears. Aid can help, but at some point Haiti needs something else. One WSJ editorial by Bret Stevens argues that

For Haitians, just about every conceivable aid scheme beyond immediate humanitarian relief will lead to more poverty, more corruption and less institutional capacity.

“Just about” is the key phrase here. Stevens pans most long-term aid as ineffective at best and counterproductive at worst, but his focus is primarily on government based aid. He unfortunately ignores cooperatives as a promising approach. In a nation with a weak and corrupt government, there are obvious problems with simply shoveling money, and co-ops can address these problems.

A few years ago, I wrote my own op-ed piece in the Seattle Post Intelligencer on the need for local cooperative economies to help get through disasters, and also assembled a manual on community-based disaster recovery. I was writing with New Orleans in mind, but my thoughts are even more relevant to Haiti.

Another problem reported today is that many of the country’s community leaders (and some governmental leaders) have died. CNN reports that the women’s movement has been particularly devastated by the loss of three great advocates. There is now a dire need for grassroots leadership development to accompany economic assistance. Assistance must be designed in ways to lessen dependency while rebuilding community leadership. Cooperatives can excel at this, and they are already at work in Haiti.

The International Cooperative Alliance is rallying cooperative movements from around the world to help cooperators in Haiti. Its Haiti earthquake page serves as a clearinghouse for information about what responses are already coming from the global co-op community.

Meanwhile in the U.S., the Cooperative Development Foundation is channeling its Cooperative Emergency Fund toward Haiti. Funds raised will be channeled through other cooperative groups with “boots on the ground” in Haiti, to build on the economic successes and relationships that have already been cultivated.

For example, ACDI/VOCA has been working for years in Jacmel, Haiti’s fourth-largest city. It has 50 staff in the city, and is the largest NGO presence on Haiti’s southeast coast. In addition to ongoing economic development, ACDI/VOCA is also distributing emergency aid.

The U.S. based National Rural Electric Association (NRECA) has an international division, whose projects have included a decade-long effort to organize Haiti’s first electric co-op in Pignon, with 500 members. This village was not seriously damaged, but is certain to see an influx of people attracted to a modern power grid that has transformed the town. NRECA is sending staff to help with aid and help begin the process of rebuilding Haiti’s electric system. This continues and expands a long tradition of electric co-ops helping each other out when disaster strikes in the U.S.

The World Council of Credit Unions has also shifted its focus from a three-year program to extend credit to Haiti’s rural poor, to providing more immediate aid. It has already pivoted toward assessing the damages to Haitian credit unions, and plans to launch a rebuilding program to help extend credit for the recovery.

Fonkoze, the local partner for the international microfinance cooperative Oikocredit, is currently assessing damage to its 40+ branches. They are urgently working to relaunch their system so members gain access to funds at a time when prices are skyrocketing due to scarcity.

There has also previously been work  underway with help from non-cooperative supporters.  USAID has supported the creation of credit co-ops for coffee growers, and supported launching a federation of credit co-ops. Alcatel-Lucent and other partners have provided technological assistance to coffee co-ops. Given the country’s effective decapitation and a growing exodus from the capital, this sort of rural development is going to be more important than ever.

The achievements of cooperatives in Haiti are admittedly dwarfed by the enormity of the problems even before the quake. However, it seems that a small effective approach is better than a large ineffective one. And co-ops working in specific communities in ways that can provide models for the rest of Haiti.

Also, co-ops don’t have to stay small. The absence of effective government provides an opportunity to build something that is more connected to the needs of communities and hopefully less prone to corruption.

There are a lot of organizations clamoring for aid, but before you send your money to buy more bottled water that will sit in a warehouse somewhere (or be turned back in midair) consider the longer view. Immediate aid and cooperative economic development can work hand in hand to build a new Haiti.

But without a more cooperative economy, Haiti will always need more aid.

Saving democracy, part two

NOTE: in my last post I raised concerns about a breakdown of decision-making processes in the government. Here’s what co-ops have to do with that:

Consider the parable (attributed to Paulo Friere, I believe) in which someone is sitting on a riverbank. He sees a person floating by, struggling against the current. He jumps in and rescues the person, but no sooner are they onshore when someone else comes floating by. So he jumps back in and repeats the good deed. And again there comes someone down the stream. This time, he turns and begins running upstream. Those already rescued cry out in indignation at his lack of compassion for the drowning, to which he replies “I’m going to find out who’s throwing them in.”

We face many urgent and specific problems (like health care), and it is good to struggle toward finding solutions for these problems. We should seek to help people obtain affordable healthcare and break up the obscene profiteering and concentration of power that led to the reform impulse.

However, sometimes we have to step back and look upstream. It is good to work on whatever issues are before us, but  at some point we’ll run out of energy unless we can address the systemic issues.

“Grassroots” gets thrown around a lot in our political dialogue, but many initiatives and groups that claim that label are using the same giant and ailing processes that have allowed things to get to this level of dysfunction. They may be a step in the right direction, but don’t provide a real challenge to the problem.

Cooperatives are the true grassroots of democracy. They are micro-democracies, in which everyday people can participate in the processes of democracy – making and considering proposals, debating issues, building consensus. Without this sort of everyday practice of democracy and equality, is it any wonder that our larger democratic systems are breaking down? How can they be maintained without a citizenry that is familiar with democratic process?

We generally treat democracy like someone who sits on the couch all year and then tries to run a marathon. We’ve got to regularly exercise our democracy muscles.

For example of how that could work, consider the northern Italian province of Trentino, where one in 50 citizens are on a cooperative’s board of directors at any given time. Assuming that average length of service is five years during fifty years of adult life, that means that roughly 1/5 of the people in Trentino have direct experience of sitting in a governing body.

Democracy (and decision-making in general) is an organizational technology for getting things done. In order for a large technological system to function it needs lots of support, both in the present and the past. Higher levels of organization are dependent on simpler predecessors. Either way, the giant and complex cannot exist for long without the small and simple.

We need to get democracy active throughout society by creating as many democratic bodies as possible. Gradually, people trained in grassroots democracy will be elected to school boards and local committees, city councils and county commissions, and eventually state and federal legislatures. Then we’ll be much better equipped to deal with the constant attacks from those whose interest are against democracy.

Democracy must be continually renewed, and the urgency of real grassroots democracy becomes all the more clear when it gets to the current point that it is arguably falling apart at the top.  We can no longer afford to simply hope that our government’s democratic processes can maintain themselves. We have to take matter into our own hands and rebuild democracy from the bottom up.

Saving democracy, part one

I’ve been making occasional visits to Front Porch Republic, which is a pretty interesting blog site with an intriguing tagline: “Place. Limits. Liberty.”

Most recently, I came across a piece by Patrick Deneen called “New World Order.” It is a bit of a downer (and the comments are even worse). He essentially frames the last century and a half as an uneasy marriage between two great forces – Equality and Stratification. He warns of their impending divorce and a scenario in which democracy is sacrificed in vain attempt to maintain our levels of prosperity.

It seems that this divorce is already underway in the health care reform process, and this has me thinking about how co-ops might be able to help save democracy.

My vote is much less meaningful if I am only allowed to vote between two “serious” candidates representing the twin capitalist business parties. I am free to vote otherwise, but that is regarded as somewhere between foolhardy and antisocial. (You voted for Nader?)

It should be obvious to anyone that concentrations of wealth are disruptive or even destructive to political democracy. Greater concentrations mean greater distortion, due to the great and growing fortunes needed to run for office. This actually threatens our prosperity AND our democracy; consider a recent NY Times op-ed by Frank Rich calling corrupt bankers (and their feeble regulators) a worse threat to our nation than al-Qaeda. Yikes.

There are all sorts of antidemocratic conventions in our political system, such as the Senate giving more weight to a voter in Wyoming than to 70 Californians. These conventions have always been around as checks to protect the (virtuous) rural voter from the (corrupt) urban one. We can debate whether they are wise or right, but they are enshrined in tradition and relatively stable. And as we shall see, stability is a very good thing.

What really has me worried is the increased frequency with which the Congress’ traditions are bent or simply ignored. I don’t mean the rapid erosion of civil liberties and snowballing security procedures, although those are alarming enough. Rather, my concern is primarily the rapid breakdown of long-held conventions within government.

Take the filibuster: Not long ago, this was used in extreme cases and required a concerted effort by the minority party to prevent the closure of debate. Senators actually had to get up and endlessly debate, or read the phone book, or recite poetry, or whatever. Now, the filibuster has mutated into a de facto requirement for supermajority.

This means the very presence of 41 senators in a party willing and disciplined enough could prevent anything from passing. This means that 50.1% of the populations of our 21 smallest states can effectively prevent anything from happening in this government. Theoretically, about 1/18 of the population can stop the show. Considering that smaller states tend to be more conservative and conservatives often vote Republican, it is easy to see this as the United States being held hostage by the Republican Party.

Unfortunately, the Democrats’ cure for this malady has been even worse than the disease, as demonstrated by their worsening contortions to get health care reform passed. As I observed with alarm last summer, Sen. Baucus did an end run around the usual committee process with his “gang of six.”

Now, it gets even worse. Typically, differences between House and Senate bills are resolved in conference committee, made up of a set number of representatives from each party and each chamber. However, ”Democrats” are now doing something else in order to sideline the Republicans.

Has it not occurred to anyone that the Republicans will follow this precedent with gusto when (not if) they regain control of Congress?

There isn’t anything sacred about the conference committee process, but we cannot afford to be confused about how laws are passed at this particular point in our history.

I sometimes work with people who are just starting cooperatives, and one of my first tasks is to help them figure out how to make decisions. As I put it, one of the worst situations is when people use opposition to the outcome of a certain decision to challenge the decision-making process itself. In such cases, there are two decisions to be made simultaneously with one dependent on the other.

It becomes very difficult to look at what is in the long-term best interest of the group, because a certain decision on process will affect the outcome of the issue at hand. Further complicating things, there may be an air of frustration about the process challenge or an urgency to the first decision, making it impossible to take the time to have an open conversation.

Does this remind anyone of anything?

On the other hand, there’s a big difference between a dozen people trying to get a new food co-op launched and the United States Congress.

I often tell groups that they need to have a firm process in place before they do anything serious. It is one thing for a group that is still meeting in someone’s living room to have a blowout, break up, and stop meeting. But once they’ve got a lease signed and contracts to install their fixtures, the stakes are raised immensely. At that point, splintering may result in lawsuits and decades of hard feelings.

That is bad enough, but now we are facing the breakdown of decision-making in the world’s most powerful legislative body. We’re not at a critical point yet (that would come when the Supreme Court gets involved), but we are certainly headed in the wrong direction.

Whatever one might think about healthcare reform, it is more important that we have a functioning democracy. Otherwise, Deneen’s dire prophesy is already coming true.

NEXT TIME: How co-ops foster political democracy

Move your money WHERE?

The Huffington post now features a screaming giant headline:

A NEW YEAR’S RESOLUTION

Move Your Money To Community Banks

This article argues that Wall Street banks are wrecking the economy and we would be better off if we collectively stopped funding their mischief. Hear hear!

The authors recommend moving funds to Main Street banks. They even created moveyourmoney.info to help people do that, providing access to a database of solvent community banks. That is a fine idea, but unfortunately they miss the opportunity to really address the problem. Credit unions are not even mentioned in the original post, although they have added this update:

Credit unions do not disclose financial data in the same way as FDIC-insured banks. As a result, credit unions are not presently included in the IRA ratings database, which covers over 8,000 federally insured banks and thrifts. IRA is developing a method to rate credit unions in a way that is comparable to the IRA bank stress ratings. We’ll be updating users of “Move Your Money” on this issue early in 2010.

That’s a good addition, but credit unions should not be an afterthought. They are generally sound, so there is much less need for ratings like what IRA provides. Some credit unions are struggling, but they typically avoided the risky behavior that caught many community banks. Credit unions are generally insured by NCUSIF, which is way better than the bank insurance that is provided by the depleted FDIC.

Wall Street banks were once Main Street banks, and their governance is often fairly similar. The main difference is scale. Banks are banks.

It’s a Wonderful Life is central to the Move Your Money narrative: the good small banker (George Bailey) wins out over the evil big banker (Mr. Potter). But they totally fail to mention that Potter was not some big banker from out of town; he was the majority shareholder of Bailey’s own building and loan. He was just as much a community banker as Bailey himself.

Bailey merely managed what was effectively Potter’s bank. Bailey’s relative powerlessness was central to the plot. In the movie, it was the collective action of the people of Bedford Falls who saved George and the bank. The movie’s story was fine, but it wouldn’t have held up in real life. Potter would have come back and replaced the board, then done whatever he wanted. That’s how capitalism works.

This means that moving your money to a community bank is not really a solution. It depends a lot on the bank. Some may be very scrupulous and community-oriented; others may be in the process of being gobbled up by larger banks.

A couple of other points are worth noting: First, building & loan associations were often mutuals (which were cooperative in essence). Second, they gradually grew and mutated into savings and loans. Remember S&Ls? They were the trigger for the country’s last big financial crisis a couple of decades ago.

What Bedford Falls really needed was a credit union that was not under Potter’s control.

In a credit union, there can be no majority shareholder. Credit unions are not perfect, and many of them act a lot like banks. But their fundamental architecture is different. They are accountable to depositors, who benefit from any profits.

Even without the values argument, credit unions are functionally superior to community banks. As an expression of the sixth Cooperative Principle of cooperation among cooperatives, many credit unions create effective nationwide service through branch sharing arrangements like this one.

So yes, move your money. Please. All of it. Right now. You don’t have any excuse anymore. Here is a credit union locator to help you get started.

Happy new year!