Thanks Sam for bringing this up!
Flywheel had the pleasure of meeting with the Ohio Employee Ownership
Center several days ago. We brought up this specific concept to Roy
Messing, their Cooperative Development Program director, and he brought
up a few possible constraints, but definitely an interest in the
possibilities.
Apparently it varies widely state by state, but laws around the use of
pension funds, 401(k) programs, health funds, and other major benefit
funds which are often held in common by workers can be somewhat
restrictive towards investment. However, he expressed that he would be
further exploring the possibilities and spreading the idea. The
additional option is that some of the companies who employ these workers
may also be interested in contributing towards these investments, and
the imagination widens when other community investment groups are
involved.
After reflecting on that option, it seems that peer-based manufacturing
could present a very interesting opportunity for many of the extant
manufacturers to be able to assist in the 'fill-in' of their supply
chains by lending towards the creation of extensive networks of small,
agile, and lean micromanufacturing shops employing p2p methods.
Investment bodies
-----
Collective Assets
- Pension Funds - these are often restricted to only 8-15% out at any
given time, especially as older generations begin to collect retirement.
However, this could change with legislation that may or may not already
be out there.
- Health benefits plans
- 401(k) Plans - many unions found their pension funds tapped out by
shoddy investment practices and switched to these plans. The issue
being that they have less control as these are often managed by more
conglomerated entities.
- Collective investment stocks such as ESOP plans and worker equity
Community Assets
- Credit Unions - Federal CUs are restricted to about 25% of their
assets being allocated towards business loans, however legislation is
being considered that would bump this up to 50%. Of course its on the
backburner, but with greater pressure that could change.
- Building & Loan Funds - These are co-op institutions as well that can
invest in building projects, commercial building loans, and other types
of business loans.
- Community Banks - Smallscale community banks can also put a lot of
weight behind things, and are often not as restricted as credit unions.
- Distributed Community Lending - so say you are starting a local worker
co-op, and folks all over town are excited about it. Give them the
chance to invest directly in the business, or possibly a many-to-many
RLF in your community!
FAQ
Question: Why focus on such small and localized entities? Don't they
have less capital?
Answer: There is greater reliability, especially in distressed times, as
these types of institutions are less likely to have risky investment
portfolios. They have very significant levels of capital to work with
as adoption of their services grow because of greater consumer
confidence and local identity.
A good example of collective benefits in action was during the Hugo Boss
debacle. Remember - Hugo Boss's shareholders were getting antsy and
trying to close down a Cleveland facility to move it to Turkey. Despite
lots of great on the ground organizing, the battle was almost lost until
a very unexpected development occurred - just before the shareholders
made the decision to liquidate the assets of the Cleveland operation,
the company in Columbus that managed the pension funds, retirement
plans, and collective benefits of the Hugo Boss workers, who happened to
own 20% of the shares of the company, threatened divestment if the
operation moved overseas. The tables were turned, and the collectively
held benefits of the workers actually wielded enough weight to stop a
major company in its tracks.
Question: Why not target larger, more conglomerated financial entities,
venture capital funds, etc.?
Answer: Consider their priorities- most financial entities that have
stake in wallstreet and global commerce have competitive investments
elsewhere to the united states, especially in manufacturing. They
demand faster and higher returns, and often are less likely to foster
projects that do not fit their vision. Having these kinds of investors
often leads to uncertainty and poor management of projects, as
shareholders will often not share the interests of the workers. Also,
with experience from major venture capital programs in our area such as
NorTech and JumpStart (pres. Obama just spoke with these folks), we are
WELL aware of how antsy these folks get just around open source software
- and they are IP obsessed. Presenting them with Open Hardware Licenses
would probably drive them up the wall.
Strategic Considerations
- - - -
What Unions often provide in the greatest is a huge base of members, and
often a very progressive vision (take the United Steel Workers, for
example). They are motivated to get their workers on the job
(especially in manufacturing), and know how to mobilize resources around
such things as training, certifications, and institutional support.
They can attract state and federal funding for recruitment and training
programs, and help with compliance. Unions can also give a lot of
credence and credibility to any kind of campaign or concept, across many
spheres of social and political influence.
Gap Financing - Union benefit plans and worker equity could act as a gap
financing measure, or a vote of confidence, to attract additional
funding from community financial institutions. For example, they could
cover the down payment for a building and initial equipment costs of a
new operation. This would boost confidence from, say, some local credit
unions or social investors, and they would provide investment or loans
towards further building costs, initial feedstocks and payroll.
Revolving Loan Funds - We already have a RLF in Ohio that acts as a gap
financing program for ESOPs, Worker Co-ops and the like. You can
receive a loan of up to $15,000 from them, however they have community
partners who will match these loans up to a total of $350,000. It's
called the Commonwealth Revolving Loan Fund, and it is actually
administered by Roy Messing (who I mention above).
RLFs are a great strategic move because they make the messiness of many
to many investment a more streamlined process. All of the financial
bodies mentioned above can invest in these funds, and with steady
returns this can lower their risk (something very important these days
for collective benefits). There is not a great amount of complexity
involved either - invest and get returns. The institutions and social
investors who are investing in these RLFs could also give guidance to
some of the folks who are seeking investment (which can be very
helpful), and possibly give additional financial support where RLFs are
acting as a gap financing measure.
Business Incubators - The business incubator model is huge. It's what
gets politicians, unions, investors and whatnot all excited. There are
some pretty good models here - pooling costs for buildings, utility
costs, and shared financial, legal, and other helpful services. These
often receive a lot of government funding, which is often pretty
hands-off. A p2p manufacturing incubator, in a more forward thinking
area, would not be a difficult effort (should i say the Bay Area?). Then
again, it may not even be impossible in the midwest, if the right
factors come together.
Also, combined with the concept of Business Incubators could be
EcoIndustrial Parks. Imagine the incubators above growing into
prototyping and fab shops. You would have offices where people design,
engineer, unit test, etc. They would send g-code and other designs down
to the shop floor where parts that could be printed would be printed, in
addition to those parts that could be torch cut, machined, pressed,
injection molded, etc. These prototypes could even be a side effort to
the actual production process, which could be happening in the same
shared facility! The EcoIndustrial aspect would be that the industrial
facilities would be combined - possibly through some off-grid
co-generation scheme, providing heat and electricity. The fabbed goods
would be produced using green practices, and possibly have the same
implications (OEM parts for electric vehicles, solar arrays, turbines,
biogas operatons; equipment for agroecological operations - anything
from soil blockers to remote climate sensing equipment.) Green P2P
would attract A LOT of attention, funding and subsidies. There are also
very real supply chains that such operations would easily nudge into,
even out here in the midwest. Especially when there are TONS of empty
industrial parks all throughout the rural midwest (and urban) that have
all the infrastructure in place, state and federal funding ready and
waiting to subdisize any use of them, and entire communities of folks
around them who would be glad to get to work!
Conclusion
-----
So, really, there are a lot of opportunities for unions to act as an
arbiter and confidence builder in p2p manufacturing. They have many of
the resources that are needed - and unlike venture capitalists - are not
going to consider manufacturing in "knowledge economy" nations to be
abhorrent or competitive with their investments. On the other side of
the coin, Unions are also beginning to show a lot of international
solidarity, so there would be less resistance than one might anticipate
to, say, international p2p supply chains if they were sustainable and
fostered the growth of manufacturing in NA and Europe.
Most importantly, they offer the advantage of oversight and collective
bargaining in more tough situations. As the p2p manufacturing economy
unfolds, one must pay close attention to the treatment of workers, to
safety and to the fairness of pay and benefits. Definately the worker-
co-op model affords for some measure of workplace democracy, but when
there is no agency outside your own shop you can get stuck. This is why
our worker co-op is joining the IWW - not to mention the excitement of
being a part of an international movement of worker solidarity.
P.S. - Michel - I can turn this into a p2p blog post here soon if you
like, with some polishing :)
--
Richard Schulte
Flywheel Tech Collective
On Thu, 2011-02-24 at 15:28 +0700, Michel Bauwens wrote:
> Dear Sam,
>
> copying two more union-p2p friends on this dialogue,
>
> Michel
>
> On Thu, Feb 24, 2011 at 10:35 AM, Samuel Rose <samuel.rose@gmail.com>
> wrote:
> Thanks Mark,
>
> This a long-term perspective/investment. Based on an ideas
> first
> articulated to me by Richard Schulte of Flywheel Tech
> Collective, who
> is copied on this email, the idea is to work with Unions to
> start
> building worker-owned cooperatives of various types,
> especially based
> around production and design of open source
> technologies/software.
> Mark, I copied you because I know that you've been in dialogue
> with
> Unions right here in Michigan for years. I wondered if you
> might know
> of some Union folks here in Michigan that might be candidates
> for this
> type of thing?
>
>
>
> On Wed, Feb 23, 2011 at 10:26 PM, Mark Dilley
> <markwdilley@gmail.com> wrote:
> > Sam - thank you for sending this out what seems so many
> days ago - I have been following this pretty keenly and am
> curious about the title of your email "+ Unions and P2P
> alternatives"
> >
> > open ears from anyone here.
> >
> > Best, Mark
> >
> >
> > On 19Feb2011, at 5:19 PM, Samuel Rose wrote:
> >
> >> "What's happening in Wisconsin is not complicated. At the
> beginning of
> >> this year, the state was on course to end 2011 with a
> budget surplus
> >> of $120 million. As Ezra Klein explained, newly elected GOP
> Governor
> >> Scott Walker then " signed two business tax breaks and a
> conservative
> >> health-care policy experiment that lowers overall tax
> revenues (among
> >> other things). The new legislation was not offset, and it
> turned a
> >> surplus into a deficit."
> >>
> >> Walker then used the deficit he'd created as the
> justification for
> >> assaulting his state's public employees. He used a law
> cooked up by a
> >> right-wing advocacy group called the American Legislative
> Exchange
> >> Council (ALEC). ALEC likes to fly beneath the radar, but I
> described
> >> the organization in a 2005 article as "the connective
> tissue that
> >> links state legislators with right-wing think tanks,
> leading anti-tax
> >> activists and corporate money." Similar laws are on the
> table in Ohio
> >> and Indiana.
> >>
> >> Walker's bill would strip public employees of the right to
> bargain
> >> collectively for anything but higher pay (and would cap the
> amount of
> >> wage hikes they might end up gaining in negotiations). His
> intentions
> >> are clear -- before assuming office, Walker threatened to
> decertify
> >> the state's employees' unions (until he discovered that the
> governor
> >> doesn't have that power)."
> >>
> >>
> http://www.alternet.org/newsandviews/article/479560/12_things_you_need_to_know_about_the_uprising_in_wisconsin/
> >> _______
> >>
> >>
> >>
> >> Aso worth reading:
> >>
> >>
> http://prop-press.typepad.com/blog/2011/02/report-from-day-five-first-chance-to-reflect.html
> >>
> >>
> >>
> ________________________________________________________________________
> >>
> >>
> >> I think the time is here to start talking with people about
> >>
> http://p2pfoundation.net/The_Political_Principles_of_Peer-to-Peer_Advocacy
> >> here, in the Industrial Midwest (which includes WI)
> >>
> >> One simple way to route around party politics is to give
> people a
> >> direct p2p way to actively reflect existing poltics as we
> saw in
> >> iceland with http://skuggathing.is/portal based on
> >> https://github.com/rbjarnason/open-active-democracy
> >>
> >> Another parallel approach is to start applying collective
> decision
> >> making and pooling of resources directly to problems people
> are
> >> addressing. In addition, creating cooperatives, supporting
> alternative
> >> currencies when appropriate.
> >>
> >> Unions in all of these states have resources, including
> pension funds,
> >> that they could invest directly in worker-owned cooperative
> companies,
> >> as has been discussed by Richard Schulte of
> flywheeltechcollective in
> >> the past. Some of them have expressed interest in doing
> this. These
> >> kinds of changes for entities like unions are long term
> changes and
> >> investments, and will take time. However, I think every
> year that goes
> >> by makes more and more on the left receptive to p2p
> alternatives.
> >>
> >> If people are interested in working on P2P political
> advocacy and
> >> approaches in 2011-2012, let's talk here and continue to
> build towards
> >> thing people can really use in places like Wisconsin, Ohio,
> Michigan,
> >> Eastern Europe, South America, etc
> >>
> >>
> >>
> >> --
> >> --
> >> Sam Rose
> >> Future Forward Institute and Forward Foundation
> >> Tel:+1(517) 639-1552
> >> Cel: +1-(517)-974-6451
> >> skype: samuelrose
> >> email: samuel.rose@gmail.com
> >> http://forwardfound.org
> >> http://futureforwardinstitute.org
> >> http://hollymeadcapital.com
> >> http://p2pfoundation.net
> >> http://socialmediaclassroom.com
> >>
> >> "The universe is not required to be in perfect harmony with
> human
> >> ambition." - Carl Sagan
> >
> >
>
>
>
> --
> --
> Sam Rose
> Future Forward Institute and Forward Foundation
> Tel:+1(517) 639-1552
> Cel: +1-(517)-974-6451
> skype: samuelrose
> email: samuel.rose@gmail.com
> http://forwardfound.org
> http://futureforwardinstitute.org
> http://hollymeadcapital.com
> http://p2pfoundation.net
> http://socialmediaclassroom.com
>
> "The universe is not required to be in perfect harmony with
> human
> ambition." - Carl Sagan
>
> _______________________________________________
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>
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