Throwing Rocks at the Google Bus: How Growth Became the Enemy of Prosperity (28 page)

Worker-owned cooperatives can even scale. The oft-cited Mondragon Corporation began in the Basque region of Spain in the 1950s when a Jesuit priest and seven of his students formed a worker-owned paraffin heater company. Over the next decades, the cooperative launched more worker-owned businesses, organized through elected councils that coordinate international strategy. Any business may apply for membership in Mondragon, as long as it is willing to become worker owned and governed. United Steel Workers is involved in discussions about launching worker-owned companies as part of Mondragon, which currently employs over a hundred thousand people.
87
Its big-box retailer, Eroski, has managed to keep even Walmart at bay in Spain.
88
But Mondragon’s enormity, as well as the scale and scope of its operations, makes it more vulnerable to the problems of traditional corporate conglomerates.

Some of its larger companies have made missteps into ethically suspect offshoring, and a few push for growth as ardently and self-destructively as any traditional multinational corporation.
89
But Mondragon’s success does prove that worker-owned cooperatives aren’t just for making organic jams; they can scale vertically and horizontally and compete with any shareholder-owned corporation on the block—without sacrificing the value of land or labor to that of capital.

Digital technologies can distribute these cooperative principles even further, giving independent workers and creative freelancers the ability to organize into co-owned networks instead of surrendering their autonomy to platform monopolies. These platform co-ops are the current vanguard of the digital economy. Most are still in the developmental stage, but then again, the Web was still in it infancy when I published my first book about the Internet, and the drive and need for cooperative platforms is more urgent now than the demand for a Web browser was in 1991. And they are
beginning to emerge. Whether or not any of these particular experiments survives as a company, they represent a new willingness to fund and run businesses in a distributed fashion.

EthicalBay, a cooperative version of eBay launching in the United Kingdom, will be owned by its producers and consumers. “Being ethical begins with who owns the company,” explain the founders.
90
The company will not accept venture funding (not that anyone is offering), which they hope will allow them to value human contributions and the sustainable use of resources over the short-term needs of capital. Fairmondo, an open-source, user- and worker-owned e-commerce platform, has operated in Germany since late 2012. On the consumer end, Fairmondo’s interface is similar to that of any major e-commerce site, offering new and used books, apparel, and electronics. However, unlike Amazon, eBay, or even Etsy, Fairmondo allows users to offer items for trade or exchange or to lend them free of charge. It also allows shoppers to filter searches for ecological and fair trade practices.
91
Ownership in the Fairmondo platform is open to all its users.
92
Profits are shared proportionally to a member’s holdings, but everyone has the same single vote in the governance of the company,
93
and the highest salary within the company may not exceed three times the lowest.
94
The platform is open source, and the company subscribes to “open innovation” practices; operations are radically transparent, including fully open books subject to member review. A quarter of profits go to fair trade and environmental organizations bounded by the collective’s local, personal, and business networks.
95

In terms of fully decentralized commerce, these platform cooperatives are still just steps along the way to digital distributism. As long as there’s a central platform—a Web site or other hub to maintain—there will always be a need for central funding and an emphasis on command and control. At the very least, there will be an ongoing dynamic tension between the provider-owners on the periphery and the manager-facilitators in the middle. As P2P Foundation founder Michel Bauwens puts it, “a truly free P2P logic at the front-end is highly improbable if the back-end is under exclusive control and ownership.”
96
Trust and authentication are rendered by
the platform, which may not necessarily end in extractive monopoly but will remain biased toward more industrial-style models and behaviors. That’s what’s threatening Mondragon’s integrity and operations today.

The answer, of course—the last piece of the puzzle—would be to replace platforms with protocols. This is where an intrinsically distributed technology like Bitcoin’s blockchain comes in. Instead of depending on a central bank or other authority to authenticate a transaction, interested parties maintain authority and ownership of the Bitcoin blockchain themselves. The bank is not a ledger in a vault or a file on a server but a public record on everyone’s devices. As blockchain developers are proving, this ability to administrate through protocols instead of platforms can extend from currency transactions to company operations.

For instance, imagine a platform-independent Uber, owned by the drivers who use it. There’s no server to maintain, no venture capital to pay back, no new verticals or horizontals in which to expand, no acquisition, and no exit. There are just drivers whose labor and vehicles constitute ownership of the enterprise. One such experiment, La’Zooz, is a blockchain-managed ridesharing app, where the currency (Zooz) is mined through “proof of movement.”
97
So instead of supplying and driving cars as underpaid freelancers for Uber or Lyft, drivers are co-owners of a transportation collective organized through distributed protocols.

Could such platform cooperatives catch on? The basic behavior of downloading an app in order to work or rent property has already been anchored in users by Airbnb, Uber, TaskRabbit, Mechanical Turk, and countless others. Using a blockchain is just a small step further, compared to the original leap into digital labor and exchange. It is the disintermediation that all these supposedly disruptive platforms were promising in the first place. Of course, just because we have the capability to employ protocol-based technologies does not mean we have to. We don’t need to resort to blockchains in order to work together fairly. We are free to build distributed enterprises under the stewardship of traditional organizers utilizing centralized platforms. If anything, our mere ability to go elsewhere keeps the organizing body in check.

More important than the platform on which they are orchestrated, distributed enterprises give a capital-depleted population a way to invest and participate in a marketplace that all but ignores contributions other than cash. The work and resources required for production were already distributed among the people; they simply weren’t recognized or accounted for as investment. The only part of the equation that could be effectively monopolized was the capital—which is why it was favored by the centralized power structures of industry.

As digital labor activist Trebor Scholz explains it, “They say that big money talks, but I say that platform cooperativism can invigorate genuine sharing, and that it does not have to reject the market. Platform cooperativism can serve as a remedy for the corrosive effects of capitalism; it can be a reminder that work can be dignified rather than diminishing for the human experience.”
98

That’s how a digital economy
should
work. Instead of removing humans further from the equation of commerce, distributed digital technologies can reinvest living human beings into the fabric of a more sustainable and prosperous economic landscape.

There is no exit.

None of us can wave a magic wand and transform the economy from an extractive endgame into a prosperous commons. Most of us are struggling to make ends meet and, at best, trying to minimize the harm we cause in doing so. Oddly enough, many of us use what spare time and money we have earned
un
doing the impact of our jobs or companies. And that gets harder every day.

However, I do believe that once we’ve developed a sense of the direction in which we want the economy to go, we can reposition our careers and our businesses to become less parts of the problem than participants in the solution. There’s a lot of hope here, if for no reason other than the fact that the best choices for your own and your business’s future sustainability are the very same choices that make our collective economy more resilient and responsive to long-term human interests. Unlike industrialism, genuinely sustainable economics is not an either-or, zero-sum game.

As I hope I’ve shown, digital commerce can be a whole lot more than taking traditional corporate capitalism to the next level. Actually—or at least potentially—it’s retrieving something much older and, to my mind, more positive for people and businesses alike. While the unimaginative big businesses of today see in the Internet a new way to automate labor, devalue human contributions, securitize wealth, build platform monopolies, and stage spectacular exits, stakeholders in tomorrow’s economy should be able to see an opportunity to participate in self-sustaining, highly reciprocal, peer-to-peer, worker-owned, and community-defined marketplaces.

Instead of simply digitizing industrial extraction in the name of growing more capital, our new media technologies can
distribute
value creation in the name of a sustainable economy. It’s time to move toward the fourth and final column in our chart.

As we saw, the artisanal economy was replaced by an industrial economy specifically geared to decrease the value of human contributions. Then we saw how each innovation and priority of the industrial era was amplified and intensified to new extremes by digital technology, leading to our current struggle with runaway and extractive digital industrialism.

But in the fourth column—what we’ll call digital distributism—those mechanisms are reevaluated and reprogrammed to serve people and their businesses. Throughout this book, I’ve been offering some fledgling proposals for what those new approaches might look like. Digital industrialism sought to extract value from the system using new, digital means; digital distributism seeks to use those same technologies to distribute new capabilities to small businesses and real communities. Digital industrialism accepts growth as a condition of nature; digital distributism strives toward a dynamic steady state.

Where digital industrialism pushes corporations even further away from value creation, a more distributed approach to digital business embraces and enriches broader constituencies of stakeholders. Where an industrial approach to networking yields the platform monopolies of Uber and Amazon, a distributed one yields worker-owned cooperatives at a level of complexity and security unimaginable before digital technology. Where the digital industrialist’s financial strategy is to extract money through increasingly abstracted derivatives, a more distributist vision would promote the circulation of money through low-friction, peer-driven currencies. Where digital industrialism seeks to use technology to expand markets forever, digital distributism seeks to recycle the same money again and again by investing and spending it in the bounded communities of the real world.

Where digital industrialism asks the economy to grow infinitely for its own sake, digital distributism aspires to sustainable prosperity. Such a steady state contradicts the growth-based economics of today’s digital economy, not least because—unlike infinite growth—the goal of distributed wealth is actually
attainable
. We already enjoy more than enough surplus
abundance to do this. We just have to be willing to accept widespread, stable prosperity as the purpose of the economy and then program for that.

To those who see the rules of a scarcity-based, industrial economy as fixed laws of nature, such an approach is heresy. This explains the disproportionate critique aimed at Pope Francis in the summer of 2015 for writing an encyclical (an official letter concerning Church doctrine) that made many of the same points I’m arguing here. On the surface, the pope’s letter is encouraging the world to take global warming more seriously. But while he frames his argument as a plea to save the planet from human-caused climate change, he blames our economic system for bringing us to the brink of environmental collapse, and the alienating effects of digital technology for our inability to recognize this predicament. In brief, he argues that our belief in infinite growth is incompatible with a planet that has limited resources.

It is not enough to balance, in the medium term, the protection of nature with financial gain, or the preservation of the environment with progress. . . . A technological and economic development which does not leave in its wake a better world and an integrally higher quality of life cannot be considered progress. Frequently, in fact, people’s quality of life actually diminishes—by the deterioration of the environment, the low quality of food or the depletion of resources—in the midst of economic growth.
1

Politicians balked—mostly because they had already been cynically using faith in God as a way of disproving global warming and freeing up the engines of capitalism to keep on churning no matter the apparent environmental impact. After all, how could human beings totally destroy something that God had created? By elevating human activity to the point where it could be blamed for global catastrophe, the pope had pulled the rug out from under the religious argument against climate change. “I think religion ought to be about making us better as people, less about
things [that] end up getting into the political realm,” responded climate change denier Jeb Bush. “I don’t think we should politicize our faith.”
2

Even more infuriating to his critics than his warnings about climate change, I suspect, was the pope’s critique of the industrial economy driving it. It sounded like the progressive, back-to-nature rhetoric of a co-op farmer or seed commons member:

It is imperative to promote an economy which favours productive diversity and business creativity. For example, there is a great variety of small-scale food production systems which feed the greater part of the world’s peoples, using a modest amount of land and producing less waste, be it in small agricultural parcels, in orchards and gardens, hunting and wild harvesting or local fishing. Economies of scale, especially in the agricultural sector, end up forcing smallholders to sell their land or to abandon their traditional crops. Their attempts to move to other, more diversified, means of production prove fruitless because of the difficulty of linkage with regional and global markets, or because the infrastructure for sales and transport is geared to larger businesses. Civil authorities have the right and duty to adopt clear and firm measures in support of small producers and differentiated production.
3

On and on he went, explaining the ways that monopoly control of capital and resources not only leads to their overextraction but also prevents a majority of people from participating in value creation. If the pope’s more distributed approach to land, labor, and capital seems informed by a larger economic logic, that’s because it is. He didn’t just pull this out of his mitre.

Although catalyzed by the excesses of our newly digital environment, the original ideals of distributism were first articulated, fittingly enough, in the encyclical letters of Pope Leo XIII
4
(1891) and Pius X
5
(1931), who were weighing in on the dangers of both Gilded Age capitalism and the rising tide of Marxism. Neither system is acceptable by itself, the popes
explained, because while private property is indeed a human right (as capitalism argues), the resulting gross inequality is also immoral (as communism argues). They’re both right. Instead of probing for a middle ground, however, the popes offered a radical alternative: to retrieve Catholicism’s pre-Renaissance values of collective ownership and human agency.

Not surprisingly, the Vatican sees King Henry VIII’s rejection of Catholicism and—more to the point—his “enclosure” of the commons as the moment when everything started to go in the wrong direction.
*
Hearkening back to an era before central currencies and chartered monopolies, the Church argued that the
factors of production
should once again be spread as widely as possible. Farmers should have access to land, craftsmen to tools, and, by inference today, digital creatives to the net. That’s distributism, plain and simple: a sort of net neutrality applied to the whole world.

The popes saw that one individual’s winnings were less important, in the collective long run, than everyone else’s ability to make a living. While successful capitalists should be allowed to keep what they’ve earned, as winners they should not be able to monopolize the factors of production for themselves at the expense of their workers and peers. Or in today’s parlance, while the founders of Amazon and Uber should be allowed to keep the money they make, they shouldn’t be able to develop platform monopolies that disconnect workers from the resources they need to do their jobs or from earning an ownership stake in the platform itself. The ability to create and exchange value must remain distributed and available—a free market.

Early twentieth-century English writers Hilaire Belloc and G. K. Chesterton—and, later, a young Marshall McLuhan—saw in distributism a definitive answer to the failures of both capitalism and state socialism.
6
,
7
,
8
They looked to that same brief moment in the late Middle Ages we’ve
been exploring, when the market was in ascendance and former peasants were making and trading things, as the best example of the ideal economic system. Wealth was relatively widely dispersed, and people had a great deal of control over their livelihoods. They had access to the commons, to a low-cost marketplace, and to their own currencies and credit systems. Craftspeople belonged to trade guilds that both bounded their investment of labor and allowed for the advancement of skills to successive generations. The former peasants of this period became so collectively wealthy that they used their surplus profits to build cathedrals and municipal projects as investments in the future.

The centralization of power by the aristocracy and the great Renaissance that followed, according to all three popes, were less a pinnacle of human achievement than an undeserved celebration of dehumanizing technologies, economic injustice, colonial slavery, and an increasingly mechanized approach to life. In distributism, they saw a way to bring back what had been forcibly left behind by the industrial age and the rise of Protestant values that were, not coincidentally, much more directed toward personal achievement, individual wealth, and progress. But the manufacturing-based, highly industrial economy in which Leo XIII and Pius X lived just wasn’t capable of supporting a postgrowth economic scheme geared toward equal opportunity and human prosperity. Besides, where was the real problem? Developing nations hadn’t yet learned to effectively resist exploitation by wealthy ones, and the planet’s environmental capabilities had yet to be tested.

If our current economic woes are not in themselves enough to motivate new approaches, digital technology with its distributed architecture may just encourage the sensibility and offer the infrastructure that a distributed economy requires. Computer chips and networks work by allocating tasks and sharing data. That’s part of why it’s so hard to keep our networks secure; they were built to share. That’s also what makes them so good at promoting exchange: in a digital environment, everything gets distributed.

Distributism may be the best starting template for how to configure a digital economy. Unlike the expensive, centralized printing presses and
warships of the industrial economy, digital technologies are intrinsically distributed. Distributed doesn’t simply mean decentralized; it’s not the principle through which alternative power centers emerge on the periphery of a system. Rather, when power is distributed, it is available throughout the network. It is everywhere at once. The same is true for capital in a distributed system, as well as value, energy, resources, companies, and people. Everything becomes more available to anyone.

New companies and those with established legacies alike can find in distributism a way to adapt to the highly collaborative yet limited growth landscape before us. It offers a strategy for individuals looking to make the transition from losing jobs to creating value in a peer-to-peer marketplace. And it suggests what governments can do to facilitate instead of hinder this transition to a postindustrial prosperity.