Great information here, Richard, thank you for sharing it. RCA On Thu, Feb 24, 2011 at 11:00 AM, Richard Schulte < [email protected]> wrote:

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:

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Dear Sam,

copying two more union-p2p friends on this dialogue,

Michel

On Thu, Feb 24, 2011 at 10:35 AM, Samuel Rose <[email protected]> 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 <[email protected]> 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_kn...

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>> _______ >> >> >> >> Aso worth reading: >> >>

http://prop-press.typepad.com/blog/2011/02/report-from-day-five-first-chance...

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>> >> >>

________________________________________________________________________

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>> >> >> I think the time is here to start talking with people about >>

http://p2pfoundation.net/The_Political_Principles_of_Peer-to-Peer_Advocacy

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>> 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: [email protected] >> 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: [email protected] 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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