The commons and co-operative commonwealth - 4 Nov 2013 - Pat Conaty


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Pat Conaty - Research associate at Co-operatives UK looks at the 'commons' throughout history and argues that the 'commons' are more relevant than ever in the 21st Century.

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  • Note that in every Chapter we end our examination of proven innovations and identify the key factors in transition that are
  • The commons and co-operative commonwealth - 4 Nov 2013 - Pat Conaty

    1. 1. The Commons and Co-operative Commonwealth Pat Conaty new economics foundation and Co-operatives UK 4-5 November 2013
    2. 2. Resilience and Transition Building a Co-operative Economy Closer to Home BASIC NEEDS: Food Energy Shelter Reclaiming the Commons Democratizing & Localizing Ownership KEY FUNCTIONS Reclaiming Finance 2
    3. 3. Four-fold crisis: a Volatile Cocktail 1. Economic: The Great Recession and the Euro-crisis - Greece an indicator of things to come. 2. Ecological: Global warming, climate change and food shortages. 3. Social: rising inequality, housing crisis, rising cost of energy, food and basic needs, huge cuts in public services, growing social unrest. 4. Political: widespread distrust of parties and politicians. Capture of the state by a global financial elite. Big Brother and Brave New World are pervasive.
    4. 4. The Ownership Question? 300 billionaires are wealthier than the poorest 3 billion citizens • 2 billion people secure their livelihood through natural commons • Over 3 billion microenterprises globally • One billion people are members of cooperatives • 1 to 2 million Civil Society organisations globally working for sustainability and justice
    5. 5. Commonwealth - a Provocative Thought 1. 400 US billionaires hold more wealth than 180 million Americans (the bottom 60%) 2. If this wealth was spread equitably, each American family of four could share an annual income of $200,000 or alternatively opt for $100,000 (twice the median family income) and choose to work a 20 hour week
    6. 6. The Commons and co-operative networks offer a a democratic way of working and living • Commonwealth is wealth beyond measure – when times get hard co-operative solutions are always unearthed • Micro-change agents need to think of how to connect mutually • History and struggles to build co-operative commonwealth provides guidance on the How question
    7. 7. The Commons we Share • • • • • • • • • Air and water Parks Libraries and books The internet Streets and sidewalks The airwaves Languages Traditions Dance steps • • • • • • • • • • Music and games Outer space Stories and jokes Open-source software Biodiversity Food and recipes Seeds and tools Know-how Caring and friendship Much, much more……
    8. 8. Silence as a Commons ‘People called commons those part of the environment for which customary law [‘usually unwritten’]…… recognised claims of usage, not to produce commodities but to provide for the subsistence of their households.’ Ivan Illich
    9. 9. Mutual Aid origins of the Company Guilds – earliest companies, rooted in ‘Fair Trade’ practice 1. From ‘collegia’ in ancient Rome: mutual aid groups of artisans for social insurance and burials: similar systems in India, China, Islamic Cordoba and west Africa 2. ‘Con pagus’ and ‘con panis’: companions 3. Charters for delegated self-governance powers in exchange for taxes: Guild of Guilds and Guildhall 4. Local town management – just price, holy days, prohibitions, trade marks from the Guildhall 5. Oaths: mutually and to the town (social, economic, religious, political and military obligations)
    10. 10. Communal Markets Typical Guild rules for flour and bread: 1. Guild members agree what the price of grain will be with the Justice of the Peace (appointed regulator) 2. Grain may only be sold on market days and during fixed hours 3. Purchases must be for the household’s own use and limited in quantity to two bushels 4. Grain may be sold later in the market day to resellers (bakers and brewers) who must be licensed by the Justices of the Peace
    11. 11. Great Transformation Karl Polanyi thesis: communal markets replaced by the commercial Market 1. Medieval economy: ‘just prices’ regulated by guilds locally but long-distance trade was unregulated 2. Long-distance free trade linked increasingly with plunder and colonisation under Merchant banking houses 3. Mercantilism: early modern development of international trade and nation state empires 4. Royal Charters from 1407: The Merchant Adventurers 5. Property rights created by private acts of enclosure that commodified work (wage-labour), land (real estate) and money (debt) – legitimated in law by John Locke. Roman law displaced ‘commons’ custom and practices
    12. 12. The Loss of the Commons 1. Commons land was widespread until the 14th century in Great Britain and Ireland – open fields, no stone walls or hedges and land stewarded based on customs and practice 2. Ancient Roman land law: the law of ‘dominium’, private property precedent that sanctified conquest and plunder 3. First enclosure in England, the Statute of Merton 1235 ‘to approve [improve] the land in order to extract greater rent.’ 4. 4000 Acts of enclosure - Commons and waste land today is only 8% of land in the United Kingdom 5. 40,000 people (0.06% of the population) own nearly half of all land in the UK
    13. 13. ‘Common rights’: Past and Present Bodmin Moor, Cornwall: Local commons, existing rights 1. Pannage: to graze pigs on acorns 2. Estovers: to take underwood, loppings, braken and furze 3. Turbary: to cut turf (peat) for fuel 4. Piscary: to fish from local streams and lakes 5. Pasture: to graze other animals 6. Soil: to take sand, gravel, stone or minerals
    14. 14. Land Enclosure Linked with development of commercial farming: 1. The medieval wool trade – under the Tudors 2. Exclusion of serfs and peasants from the land 3. Creation of vagabonds and wage-labour 4. Pre-condition for the development of capitalism: ‘primitive accumulation of capital’ (debt-based money) and creating the ‘dependency of wagelabour’
    15. 15. Market Economy and Land Enclosure ‘What we call land…..invests man’s life with stability… it is a condition of his physical safety… ‘We might as well imagine being born without hands and feet as carrying on life without land… ‘ yet to separate land from man and organise society to satisfy the requirements of a real-estate market was a vital part of the utopian concept of market economy.’ Karl Polanyi, The Great Transformation (1944)
    16. 16. Struggles against Enclosure and for Co-operative Commonwealth and ‘the Vote’ 1. Levellers and Diggers – Arguments to Cromwell for Land tax, franchise, annual Parliaments, co-operative commonwealth: Gerrard Winstanley and ‘Law of Freedom Platform’ (1652) 2. Thomas Spence – Parish Land Trusts for land stewardship locally and capturing rents for community benefit: ‘real rights of man’ (1775) 3. Chartist Land Company (1847) – to secure ‘the vote’ and develop co-operative villages, community facilities and 2-4 acres per family – 60,000 investors and several co-op villages developed
    17. 17. Thomas Spence – Parish Land Trusts (i) (ii) (iii) (iv) (iii) 1774: Inspired by grass roots campaign to stop enclosure of Newcastle Town Moor 1775: Parish Land Trust Plan to capture the ‘unearned increment’ and differential rents for the people Co-operative Land Society model – ‘you use the land, or lose it’: community is the landlord and leases to citizens Aristocratic and commercial rents are transformed into community income 1793: Real Rights of Man – disagreed with Tom Paine, argued that ‘all dominion is rooted and grounded in Land’ – real democracy needs a ‘commons rights’ foundation
    18. 18. Citizen Corporate Charters – USA (1780 to 1860) 1. 2. 3. 4. 5. 6. 7. US Declaration of Independence against colonial oppression Company charters issued by US states from 1780 Charters of companies were time limited (3 to 10 years usually) and revocable - both for profit and not for profit companies – charters regularly revoked or not renewed by citizen groups Banks had the shortest charters and private banks banned in Indiana and Illinois Jury trials for company directors for corporate malfeasance - Unlimited liability and Directors prosecuted for disobeying their charter conditions Shareholders only had one vote (no voting shares) Political donations illegal and limits to land and property holding
    19. 19. Co-operative Commonwealth Movements Re-forged in times of Depression since 1815 • • • • • • • 1820s: Birth of co-operative movements in Britain and France 1840s: Hungry 40s and ‘Rochdale principles’ developed 1870s: Long Depression - Knights of Labor and Greenbacks 1890s: Syndicalism, Guild socialism, Garden cities 1920s: Movements on the rise but repressed brutally 1970s: New wave internationally spreads 2010s: A rebirth………La Via Campesina, P2P Foundation, New Economy Coalition (USA and Canada)?
    20. 20. 1844: Joint Stock Companies Act (UK) • Curtailed Parliamentary charters in the UK – companies could be just registered • Limited requirements: to keep accounts, complete an annual audited balance sheet • 1855 subsequent law introduced limited liability • 1862 law abolished accounting requirements, only one obligation to maximise shareholder profit • 1929 crash brought back the requirement of audited accounts
    21. 21. 1844: The Rochdale Pioneers Developed Co-operative law and the 7 Co-operative Principles (i) Democracy: one-member, one vote (ii)Open and inclusive membership (iii)Distribution of surplus in proportion to trade (iv)Payment of limited interest on capital (v)Political and religious neutrality (vi)Cash trading and provision of pure, unadulterated goods (vii)Education of member households from a levy on surpluses
    22. 22. Commonwealth Economy Thinkers Co-operative political economy ‘Heretics’ • • • • • • • • • Robert Owen and the Utopian socialists John Stuart Mill and Harriet Taylor Mill Ruskin, William Morris and the Arts and Crafts movement Henry George, Tolstoy, Kropotkin and Martin Buber RH Tawney, Bertrand Russell, GDH Cole - the Guild Socialists Karl Polanyi and Erich Fromm Gandhi, Vinoba Bhave and JP Narayan Ivan Illich and EF Schumacher Jane Jacobs, Vandana Shiva and Elinor Ostrom
    23. 23. John Stuart Mill: Co-operative Economist 1. Principles of Political Economy (1852) – Book 4 2. Supply-side economist: studied Sismondi 3. Banking defect: argued in 1841 that depressions caused by failure of businesses to access productive capital 4. Faulty markets: markets good at creating economic values but poor at distribution – distribution is a social and political matter 5. Solutions: Producer Co-ops, land reform, suffrage (men and women) and inheritance tax 6. Inspired development of municipal land reform in Europe, Single Tax on land and helped pass first law for Co-ops
    24. 24. Henry George – Land Value Tax 1. 2. 3. 4. 5. 6. Progress and Poverty (1879): inspired by JS Mill proposals and vision Mill and Leon Walras in France argued for land nationalisation – Single Tax is a pragmatic reform devised by Henry George to achieve this Mill inspired public land creation to clean up cities, develop municipal energy companies, parks, allotments for food and affordable housing George active in the American co-operative movement: showed links between land values, homelessness, poverty and costs for small business – strong support in USA, UK and Ireland Land Value Tax (LVT) implemented in Liberal People’s Budget of 1909 (rejected by House of Lords and dropped) – Lloyd George and Churchill LVT implemented in some cities of Pennsylvania and in Hong Kong (38% of tax revenue from a land value tax)
    25. 25. Wealth v Illth John Ruskin – Unto this last (1862) – ‘co-operative economy’ vision – a ‘Political Economy of Art’ inspired Tolstoy, Gandhi, RH Tawney and the Guild Socialist movement 1. Chrematistics : the usurious manipulation of money, property and wealth to maximise exchange value (‘illth’) 2. Oikonomia: the wise management of resources and use values for the well-being of society – ‘wealth is life’ 3. Guild of St. George: social economy venture from 1871 for preserving vernacular skills, bringing land and buildings into co-operative trusteeship and reviving the commons by ‘tithes of property’ – inspired by medieval craftsmanship 4. Non-profit housing (1870) pioneer with Octavia Hill
    26. 26. RH Tawney – Guild Socialist 1. Acquisitive Society (1920): ‘Property and Improperty’ – need to replace ‘absentee ownership’ with up close, and dispersed ownership of productive assets 2. Francis Bacon: ‘Wealth is like muck, it works best when it is well spread.’ 3. Evolutionary theory of Democracy and Property Rights Stage 1: Rights to trade (early charters to artisans) Stage 2: Religious freedom (freedom of thought) Stage 3: Civil rights – bill of rights: press, vote, speech, etc Stage 4: Economic democracy (workplace and public ownership and governance) – highest stage and ‘mutual liberty’
    27. 27. 1920-40: Destruction of Co-operatives - Italy: Mussolini (1921-24) seized assets of 8000 Italian co-ops and took them over, killed leaders and burned shops - Russia: Lenin repressed them but allowed them to revive before Stalin destroyed agricultural co-ops (65% of food provision) and then urban ones in the 1935 - Germany: Hitler seized their assets and nationalised them – 1100 consumer co-ops, 21,00 credit unions, 4000 co-op savings banks and 7000 agricultural co-ops - Austria: following Hitler’s invasion leaders replaced by fascists - Spain: Franco arrested and killed leaders, many took exile in Latin America
    28. 28. Co-operative Commonwealth Development – ‘Convivial Tools’ for Economic Democracy 1. Co-operative land reform 2. Democratic corporate reform 3. Co-operative money and co-operative capital Sources: 1. Ward Morehouse, Bob Swann, George Benello and Shann Turnbull, Building Sustainable Communities, 1989, Bootstrap Press. 2. Mike Lewis and Pat Conaty, The Resilience Imperative – Co-operative Transitions to a Steady-State Economy, 2012, New Society Publishers.
    29. 29. Trusteeship Companies Gandhi’s idea of Socialisation (1931) 1. An alternative to nationalisation and privatisation 2. Co-operative economy path between capitalism and communism 3. Builds on Ruskin’s ideas of co-operative trusteeship in Unto this last – a co-operative economic solution 4. Developed by Vinoba Bhave and JP Narayan after Gandhi died – Bhoodan and Gramdan land reform movements 5. Inspired Martin Luther King and the Community Land Trust movement in the USA
    30. 30. Land Trusteeship in India 1. Bhoodan: ‘land gift’ movement (1951-57) - Vinoba Bhave led campaign in 1950s to get large landlords to gift one sixth of their land to the rural poor - Movement raised significant acres of land in 1000 villages but much land lost when recipients borrowed on it and it was repossessed 2. Gramdan: ‘village gift’ movement (1952-70) - Another strategy to persuade gifted land and other small plots to be organised as village trusts – overcome the risk of repossession - Both Bhoodan and Gramdan together secured 5 million acres of land over 20 years 3. Big barrier that impeded progress – access to low-cost finance for cooperative economy development
    31. 31. CLT Pioneer in Scotland Isle of Eigg Heritage Trust – Land for People (i) Community buy-out of the island for £1.5 million: struggle by the islanders with absentee landlords and corporations (ii) CLT established in 1997 – has developed community owned businesses: including shop, tourist facilities, workspace, hydro power plants and wind farm (energy now 98% renewable) (iii) Successful struggle led to Community Land Unit and Land Reform (Scotland) Act 2003 giving communities a preemptive ‘right to buy’ – See Alastair McIntosh’s book, Soil and Soul: People versus Corporate Power (iv) 250 CLTs in the USA and 50 CLTs in the UK
    32. 32. Enclosure – The End Game • Mega-corporations, China and global banks are buying up increasingly scarce “natural and public capital”, removing equitable access and accelerating ecological destruction • There is a life and death battle to protect land, water, atmosphere and social security.
    33. 33. Beyond the Fragments? • Alternatives exist everywhere in small, dispersed communitybased local approaches. The Blessed Unrest of Paul Hawkins.... But?? • How do we resist, unite and democratically build a social and ecological economy?
    34. 34. The Commons and co-operative economy networks: Brian Davey, Feasta (Ireland) • Consider these diagrams as three stages of knitting together a more powerful relationship between civil society, co-operatives and commons organisations without compromising their diversity and uniqueness, and without creating a top down hierarchy?
    35. 35. Co-operative Economy – Inverting the Paradigm The Need to create ‘Co-operative Oceans’ ‘Co-ops in the West are a bit like sea water fish in a freshwater pond. The capitalist world in the last 200 years has evolved its own institutions, instruments, political frameworks, etc. ………Economic democracy needs its own institutions.’ Professor Jaroslav Vanek, Cornell University
    36. 36. Co-operative Sector – Latent Transformative Power • • • • • I billion members worldwide Providing services to 3 billion people weekly More employees than the multinationals Involved in all sectors of the economy Co-ops UK: Trust in corporations only 18% by citizens compared to 79% trust level in Co-op business • Co-op sector growth of 20% in the UK 2008 -2012 compared to economy growth of 2%
    37. 37. ‘For Service’ – the Co-operative Motto 1. For profits (investor owned corporations) 2. Non-profits (NGOs: due to their legal structure have restricted legal potential for citizen investor membership) 3. Not-for-profits (Co-operative movement motto: ‘not for profit, not for charity but for service’) 4. ‘Foundational economy’ (Prof. Karel Williams) is hard wired locally to regions: for ‘provisioning of food, housing, utilities, finance, repairs, maintenance, health, social services, education, advice, knowledge transfer, etc) 5. Strategic opportunity for the Co-operative movement: because in OECD countries over half the jobs are in services
    38. 38. Guild Socialism and Associative Democracy Movement in Great Britain: 1907 to 1949 (i) Co-operative strategy to organise industry democratically – national guilds (railways, mines and construction) and local guilds – active work 1919 to 1929 (ii) Agricultural guilds for farming and the food sector (iii)Garden cities and towns – for regional self-reliance (iv)Social credit proposals for monetary reform (Major Douglas) (v) Agricultural guilds, Garden City movement advanced and National Construction Guild established that built affordable housing in many big cities (vi)Access to low-cost finance was a problem (vii)Movement leaders led work to create the Welfare State and the NHS in the 1940s
    39. 39. Pluralist Commonwealth Gar Alperovitz (USA) strategy: What then must we do? 1. An agenda for ‘evolutionary reconstruction’ 2. Lack of countervailing power: Trade unions 36% of workers in 1946 and today only 12%; but Co-ops 130 million members in the USA – 4 in 10 citizens. 3. Pluralist strategy for Systems Change – ‘America After Capitalism’ and Paradigm Shift 4. Key elements of the strategy include: - Democratic ownership (Co-ops, ESOPs, municipal) - Checkerboard strategy for decentralisation: municipal-social partnerships (e.g. Evergreen Co-ops in Cleveland) - Public banking and social finance systems
    40. 40. Evergreen Co-operatives (USA) – The Democracy Collaborative ‘Green Economy’ Co-operative Partnership • Cleveland, Ohio: a city that has lost half its population through deindustrialisation over recent decades • Partnership backed by anchor institutions including the City, universities, hospitals, the Ohio Co-op movement and the Cleveland Foundation • $200 million social investment fund set up to invest at 1% to capitalise worker ownership co-ops using a Mondragon model • Co-ops created for solar energy installation, local food enterprises and a low-carbon laundry for hospitals • Largest urban farm in the USA set up with a wind power heated greenhouse (3.5 acres) and growing annually 7 million heads of lettuce and 500 tons of herbs
    41. 41. How can we spread Co-operative Networks? 1. Network co-ordination is a mutual service function – not imposed by top-down management 2. Co-operating units are semi-autonomous and activate cooperative network activities in the interests of a greater whole/narrative rooted in common values and co-operative principles 3. Co-operative Consortia connect the nodes together at city, regional and national levels 4. Co-operative finance and mutual insurance systems comanage risk and social investment
    42. 42. Co-operative Consortia, Mutual Guarantee Societies and Social Co-op Investment 1. Co-operative Consortia in Italy unite co-ops in specific trade sectors (280 sub-regional ones have been developed for social coops); provide legal advice, training, regulatory, back office administration services, tendering and negotiating power through a federated structure of service provision to their co-op member firms 2. Mutual Guarantee Societies (MGS): pool finance risk among coops and enable lower cost capital to be secured from Co-op banks and social investors 3. Co-op investment systems:: Consorzio Gino Mattarelli Finance (national – consortium for the social co-op movement) and CGM (the national consortium) does research, national development work and training for provincial consortia trainers
    43. 43. Social Co-ops – An emerging international movement 1. Italian Social Co-op movement growth transformative over 20 years - 14,500 in 2013: 360,000 paid workers, 40,000 disadvantaged paid workers, over 31,000 volunteers and 57% growth since 2005 - more than 50% of the non-profit sector workforce service provision for almost 5 million people and annual turnover of €9 billion - typical social co-operative size of 30 worker members 2. Social Co-op legislation and growth in other countries: France (1997 law), Poland (2003 law), Spain, Portugal, Hungary and Quebec (1997 law) 3. A Public-Social Partnership model for England and Wales – Co-ops UK research being completed
    44. 44. Commonwealth Reconstruction ‘Convivial tools are those which give each person the greatest opportunity to enrich the environment with the fruits of their vision. Industrial tools deny this possibility and they allow their designers to determine the meaning and expectations of others.’ Ivan Illich (1973) Tools for Conviviality
    45. 45. A Commons – Three Elements 1. a Resource 2. a Community of stakeholders 3. an agreed set of rules for provisioning and stewardship
    46. 46. Elinor Ostrom – Commons Design Principles 1. 2. 3. 4. 5. 6. 7. 8. Clearly defined boundaries which defines who has access. Appropriation and provisioning rules tailored to local conditions. Collective choice arrangements that allow resource appropriators to participate in decision-making. Effective monitoring and accountability to appropriators. Graduated sanctions for resource appropriators who violate operational community rules. Conflict resolution mechanisms that cheap and rapidly accessed. Self-determination of the community and recognition by higher-level authorities. Larger common pool resource systems are organised in the form of nested enterprises of multiple levels with smaller ones at local base level.
    47. 47. Closing Thought ‘Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed it is the only thing that ever has.’ Margaret Mead