The coming crash, and why co-ops are so important: Mark Simmonds of Co-op Culture

Mark Simmonds gave us some free advice that saved us hundreds of pounds when we were setting up as a workers’ co-op. We talk about his work, and get deeper into the philosophy of co-operation. Find the video below.

What do you do?

Depending on who I’m talking to, I’m a co-operative business advisor or a co-operative activist. I spend a lot of time talking with people who have ideas for setting up co-operatives, and are looking for help. The advice often takes the form of: ‘here are some other people doing something similar – you might want to go and talk to them first’, or ‘here’s where to do some more research’, or even ‘here’s why this idea won’t work’. Sometimes we’re able to feed them into some sort of support programme, depending on what sector or what part of the country they’re in. I work all over the country, and I do a lot of pro bono work which is covered by the paid work that I do.

Any size co-ops?

Yes, but we tend to focus on co-ops that are working in sustainability, and a little bit for charities and other social enterprises, although this is rare – we focus on co-ops; and also, we don’t work with groups that exploit or keep animals.

And people can find you at Co-op Culture – is that right?

Yes – at culture.coop.

Why co-operatives?

It’s where I came from. When I left uni, I went to work for a workers’ co-op in Nottingham, as a chef. I did that for a few years, until I left and went into education. I tend not to proselytise too much about co-ops – for me it’s more about groups of people coming together to work for social change, and they almost invariably set up a co-op – almost as if it’s the default setting. So I don’t really feel the need to go around banging the drum for co-ops. It’s more about looking at the problem they’re trying to solve, and working out how they organise around that. People tend to almost automatically set up co-ops, I find.

What successes have you had?

It’s not just me at Co-op Culture – there are 4 of us: one based in Southampton; two in the Lake District and me in West Yorkshire. We would probably point to the large number of successful co-ops we’ve helped set up over the years; and also other co-ops that we’ve worked with to help set up governance reviews or finance overhauls etc. We’ve worked with big worker co-ops like SUMA, Unicorn etc. Basically, a long list of co-ops we’ve helped. You can see them if you go to our website.

Is it mainly the co-operative structure you help start-ups with?

It’s a whole mixture of stuff. Typically, we’ll help them decide on what the appropriate legal form and organisational type should be. When we’ve established that, we’ll help them write business plans, to get start-up finance. This includes loans or shares. We do quite a bit of work around community share offers – the growing use of withdrawable share capital in the ‘society’ model, that’s available to us in the UK, which allows you to go out to communities and ask them to invest in what you’re doing. It’s been used a lot for community energy, community-owned pubs and even to buy land. We helped Whistlewood Common, a Permaculture project in Derbyshire to buy their land, and then to do another share offer to help them build a roundhouse for their educational activities. So we do a lot of finance work – but we’ll do governance reviews as well. It might be that a co-op will need to change their rules, revamp their policies or their internal structure. I find that sort of work quite enjoyable. It’s quite interesting to see the emerging use of things like sociocracy, particularly within worker co-ops.

Sociocracy is a decision-making process – is that right?

It’s a way of organising your internal systems. It does involve a lot of decision-making as well. ‘Distributed governance’ is another term that’s used for it – trying to break down the hierarchies and the blockages within decision-making. It’s not a system that’s limited to co-ops, but there’s a lot of interest within co-operatives at the moment. My interest is more on the governance side – I also sit on the UK governance expert reference panel, that’s convened by Co-operatives UK, and chair the governance committee of Co-operatives UK as well.

Doesn’t there have to be some sort of hierarchy within organisations, based on knowledge and experience?

There often is a de facto hierarchy, but that’s not a problem. It’s acknowledging that, and finding ways that groups of people working together can support each other in their work, and take effective decisions quickly. One of the principles of the sociocratic way of working is that you’re not looking for perfection – you experiment and find something that’s good enough to try, and then you’ll try it and evaluate it. Then it’s possible to move quite fast.

Is that similar to Loomio?

Yes. Loomio we use quite a lot. I chair the Co-operative Development Forum, which has a Loomio group – it’s open to anyone interested in co-operative development. The people behind Loomio don’t brand it as sociocracy, it’s very much based on that decentralised way of organising.

What are the biggest obstacles that you face in trying to grow the co-operative economy?

Finding ways to fund co-operative development – finding ways to get paid, in other words. We’re quite lucky, in that we do co-operative development because we enjoy it, and we can make enough money to live on. It’s certainly not the right career if you want to make lots of money. The other obstacle is probably the market-making side of things. Because we’re doing the hands-on support for people, we’ve got very little time to go out and find the new co-ops. We’re able to do a little bit of that – next week, for example, I’m part of a meeting being organised by Co-operatives UK for bicycle couriers who are looking at setting up worker co-ops. That’s almost impossible to get funding for at the moment, so we have to do that sort of thing without funding. We’ll be going and meeting couriers in major cities all over the country, and we’ll have to fund that ourselves. But as long as we can eat and pay our bills, we’ll keep doing it.

I suppose the big question is – how can they get to a position where they can compete with the Ubers and the Deliveroos of this world?

Couriers already run several apps on their phones anyway, so you’d just be creating another income stream in parallel, probably working with people who wouldn’t deal with those companies, either because they’re too small, or they have ethical objections to them. So you might imagine that a courier co-op within a city could actually build up trade amongst small and ethical companies – veg box deliveries for example.

What could individuals do to help the co-operative sector?

Start one. Can you re-engineer your livelihood so that you’re actually working as part of a co-op rather than working for somebody else – so that you can actually capture the value you create, rather than having it taken from you. That’s probably difficult for a lot of people, but certainly if you’re self-employed – we’re setting up lots of co-ops of self-employed people who come together to create a market vehicle for themselves, to be able to share work and combine on jobs etc.

So if people reading / listening to this think they might want to do that, but wouldn’t know where to start, could they just contact you?

Sure. Mark at culture dot coop. There are also lots of resources on ‘the Hive’ website. That’s a programme run by Co-operatives UK that we deliver some support through, which is there to help start and grow co-ops, and it’s funded by the Co-operative Bank. They also have some start-up resources. It depends on what you want to start a co-op in, as well. There will be some sector-specific stuff. For instance, if your local pub was up for sale and you were thinking that you could buy and run it as a community – and there are over 100 communities that have either done it or are actively working towards it at the moment. There’s a website specifically for people thinking of setting up community pubs. So it very much depends on what you want to do, on where you go to get help and information. I’m fielding calls all the time from people who’ve had a mad idea in the pub, then found me and phoned me up.

So you’re quite happy to receive calls from people with wacky ideas?

Yes, and there are probably about 40 people like me around the country. We all know each other, and so if someone calls me from Bristol, I can put them in touch with someone there. We’re a very co-operative bunch, and we share work around.

An informal network of co-operative development workers?

We’re actually a formal network as well. There’s the Co-operative Development Forum that Co-operatives UK provides the secretariat for as well. So any Co-ops UK member who’s interested in co-operative development can join.

I was reading about a project you’re involved with – Platform 6. Can you tell us a bit more about that?

Yes, Platform 6 is a relatively new project. It’s a co-op, and we’ve just opened for membership. It was inspired by a worker co-op solidarity fund, which was a way that people who wanted to support worker co-ops could put a tiny bit of money in every month.

Is that the Solid Fund?

Yes. So I’m a member of the Solid Fund. I put in a pound per week. I think they’re up to around £80-90k at the moment, and you can put proposals in to the Solid Fund. I’m probably going to put one in to fund my travelling to meet those couriers. They have funded some work that we did around what we’re calling ‘barefoot co-operative development’, about taking people out of their worker co-ops and using them to support other co-ops. We ran a couple of workshops around that about 8 months ago. So it’s a simple thing – but it is only workers’ co-operatives. So we were thinking ‘let’s create something similar, but open to all co-operatives, both to contribute to and to apply for funding from as well. So if anyone has an idea for a co-op, Platform 6 will be the place to go to ask what people think, or if they know anyone who’s done something similar, and you have an online community of practice that will pitch in to help. So hopefully it will become one of the go-to places. Even though we haven’t launched, we’ve already had our first application for funding.

At Lowimpact.org, and especially NonCorporate.org, we’re interested in worker co-ops as a way to reduce market share for multinational corporations. Is that something that’s important to you?

It is and it isn’t. The reason I’m involved with co-ops is not because I want to slowly turn the oil tanker around, it’s because I think we’ve got really hard times coming, and either we slowly build the co-operative sector now, or we have to build it very quickly when crisis occurs, because at that time, a lot of players will disappear. For example, as soon as the major supermarkets aren’t able to make profits any more, they will stop operating. They’re not interested in providing food, they’re interested in extracting profits. So rather than stealing market share, I see co-ops as lifeboats. The food system is so broken now that it’s really difficult to have a sustainable, profitable business where you’re actually doing things right – i.e. providing healthy food, supporting local economies, paying decent wages to growers and suppliers etc. That’s really difficult. Now, it takes a lot of resources to maintain a lifeboat, but one day it’s going to be really important. So with food as an example, it’s hard to be a co-op in that sector, because the corporates are externalising their costs, mostly onto the environment. So it’s important to have the co-ops there, or even just some examples there, so that they’re ready to go when we really need them. Someone asked me the other day – ‘when the crisis hits, whether it’s caused by a financial crash or something else, you think it will be a big opportunity for co-ops?’, and I answered ‘yes, but in the same way that the Blitz was a big opportunity for firefighters’. The only way we’ll get through this is by co-operating.

So let me get this straight – you’re not so interested in slowly building a sector to replace corporate capitalism; you think that capitalism is inevitably going to crash, so let’s have something to catch people when it does.

Yes, although there’s no reason we can’t have a twin approach around that. If we can encroach on corporate market share, great. But one way of increasing market share will be the crash, because a lot of the antisocial economy needs to fall away and cease to operate – much of the current economy is actually damaging to people and to the planet, so it needs to stop. So it’s not so much that we need to get into that space – we just need to do what we do, and they need to stop a lot of what they do.

Is scale an issue with co-ops – i.e. is there a maximum size, to keep co-operative values?

I think so – and I think it’s to do with the number of people who can effectively work together, and I think it’s important to have a link with community as well. So I think co-ops are better smaller, and if they grow, they should grow with a sort-of strawberry patch model. So instead of becoming bigger and bigger, co-ops can split to form a network of smaller co-ops, with an umbrella of secondary co-ops holding them together. Then you can have economies of scale, but keep small co-ops. This is a bit like the early days of the Co-op Group, where each town had its own co-operative society. Here in Hebden Bridge, within a few miles we had 4 different co-operative societies – but they had the overarching Co-operative Wholesale Society, that was able to purchase for all of those member co-ops, and also had a role in co-operative development – setting up new co-ops. But gradually over the years, those societies have all merged together, so now we have less than 20 co-operative retail societies now – and so they lose the connection to their communities. So I’m a member of the Co-op, but so are millions of others, and it’s nation-wide. I don’t have that direct connection that I would if I were a member of the Hebden Bridge Co-operative Society.

I really like the ‘strawberry patch’ metaphor.

Yes. There’s a really interesting co-operative bakery in San Francisco for example, called Arizmendi – and ‘baked in’ (I see what you did there – Dave) to their model is that they will create more bakeries. So they use some of their profits to fund the development of the next bakery.

Do you think that players in the co-operative / non-corporate / solidarity economy, or whatever you want to call it, can co-ordinate their efforts to help grow the sector, by campaigning together, sharing customers, sharing knowledge etc?

Yes – I’m particularly interested in co-ordination around the Solidarity Economy – taking it wider than just co-ops, because not every healthy, local economy will be 100% co-ops. I went to the CTRLshift event earlier this year – did you hear about that?

Yes, I was on the steering group for a while, but I dropped out – precisely because it wasn’t focused on the Solidarity Economy, and it was too broad a church for me – it seemed as though parts of the group were actually pulling in different directions. Some wanted to replace the corporate sector, while others wanted to ‘humanise’ it – which I think is a) impossible, and b) greenwash.

It was a bit too wide, yes, but I think I’ll go again next year – for the networking, and because it can showcase some of the things I’m involved with, that most people don’t know about. If all it is is an annual ‘stirring of the pot’, I think that will be fine. I think we might have been expecting too much from it, really. I think what we really need – and this happened with community pubs and shops – are stories. We need stories to get critical mass to really get things happening. This is what happened with co-operative retails societies in the 19^th century. The movement spread by word of mouth, as people explained what had happened in other towns. But then the postal service was introduced, and ideas and news were able to spread via the mail. So it was the Penny Black that helped the initial growth of the co-operative movement.

Do you think that’s the movement we’re talking about – as you say, the Solidarity movement is wider than the co-operative movement, but having talked with Colm at the Solidarity Economy Association, I know that values, as well as ownership, is important in that movement. Mutualism is an interesting concept too – and that’s definitely based on ownership, so that no-one has a route to extract wealth from the people doing the work to create it – so that can include co-ops, but also self-employment, but not small businesses that are owned by people who don’t necessarily do any work, and can pass that ownership on to their children, who haven’t done a thing. I’m not sure what to call the movement, so I tend to talk about the ‘new economy’, which seems to cover it.

I like my role in this movement – I see myself as a bit like a pollinator. I get to buzz around, seeing all these people doing different things, but with the same values. Some might know about the Permaculture movement, others about the Solidarity movement, but we’re all so busy doing our own thing, that co-ordination is quite difficult. Maybe we’ll only really galvanise in a time of crisis, when we need to co-operate to meet our basic needs, as institutions and organisations fall away.

So you see crisis as the main driver for change?

Yes – it seems clear that the current economy can’t continue.

Why do you say that?

It’s energetically impossible for a start. We’ve burnt through half of all fossil fuel reserves, but the second half is much harder to get. The energy returns compared to energy investment for fracking and unconventional oil are so low that it’s going to be difficult to get, and not very economically worthwhile.

And we shouldn’t be burning it anyway, if we don’t want to destroy ecology faster than we already are.

No. I’m quite sure that the effects of climate change are going to be very serious. Sometimes I think ‘actually, why am I bothering?’, but you’ve got to keep swimming really, haven’t you?

Yes. What else would you do?

Exactly.

What about nuclear – won’t that replace fossil fuels?

Nuclear’s quite carbon-intensive. You need a lot of fossil fuels to produce nuclear power / process the waste etc. I think it’s got an energy return on energy invested of about 10:1, which is quite low. Wind power is around 20:1, solar pv around 7:1. In the early days of oil, it was around 100:1 – so to get 100 barrels of oil, you had to burn one barrel. Oil is around 15:1 now, and falling. That’s really why fossil fuels are unsustainable – because it’s continually becoming less worthwhile to obtain it. We need an economy that uses far less energy, and that will be a very different world. It will mean that horizons contract too – and that will be another thing driving co-operatives. People will exist within their bioregion, and needing to co-operate within that.

How do we speed things up?

There’s an opportunity around the possibility of a Labour government. They’re promising to double the size of the co-operative economy. We’re not sure what that means yet – does it mean doubling the number of co-ops, or doubling the contribution of the co-operative sector to GDP? They’ve got some interesting ideas around changing the legal frameworks available to co-ops, and they’re talking about a national co-operative development agency, so it would be quite interesting to see what that looks like. The biggest barrier at the moment is getting the co-operative movement to work together, to engage with these kinds of ideas. People are beginning to talk with each other. I think we’ll see some significant movement building in 2019. Most co-ops have been focusing on just running their own co-op, but I think this will change, and they’ll start looking at developing a movement.

Let’s hope so. A group of us, including Open.coop, the Credit Commons Collective and author Thomas Greco, are getting together to attempt to launch a UK mutual credit network. We’re really inspired by a group called Sardex, in Sardinia. Last year, they did the equivalent of 81 million euros in trade, with no money changing hands at all. And Sardinia has a population of less than Birmingham. So I think there’s huge potential for the UK. We’re just getting expressions of interest at the moment. I was wondering whether you’d be able to help us spread the word around your networks.

You can join the co-operative development Loomio group if you like, and speak directly to people about it. I can invite you to join, and if no-one objects within a week, you automatically get added. All the movers and shakers you’re after will be there.

OK – I’ve been meaning to use Loomio for a while. Is it a steep learning curve?

Not really. I keep noticing new functions that I haven’t used, but if you can use Whatsapp or Facebook, you can use Loomio.

Over the years, we’ve seen new companies that promised a lot in terms of changing how we do things – like Ben & Jerry’s, the Body Shop, Innocent Drinks, Green & Blacks etc. But now they’re all owned by corporations – Ben & Jerry’s by Unilever, Innocent Drinks by Coca-cola etc. Now we have companies like Fairphone and Ecotricity, which are great, but they might go the same way. We don’t want to help the development of a company that looks good, but will end up contributing to the profits of the corporate sector. Is there a reason that companies like this don’t set up with a co-operative structure, so that they can’t be preyed up on by the corporate sector?

Generally, it’s the exit strategy for the owners, isn’t it? It’s the way they get out, and collect all their sweat equity. Entrepreneurs often like setting things up, but then get bored and want to get their money out. Unless you have founders who are very philanthropic, and do the John Lewis thing and hand over the company to the workers (similar to what Guy Watson is doing with Riverford – and he’s actually getting money out of the company for creating an employee-owned structure), then that’s what usually happens.

Isn’t there a way that founders of co-ops can be rewarded for the work they’ve put in?

Yes – you can even create something whereby the founders have shares in it. But to avoid this problem in the first place – just set up as a co-op from the start, and lock in the assets for the community, so there’s never any incentive to sell out; whereas, especially in the tech sector, you have ‘angel investors’ and venture capitalists, who put huge amounts of money into tech ideas, most of which fail. They’re just burning money – but they only need one of them to become the next Facebook, and they’ll suddenly be extremely rich.

A final left-field question: if you had a minute on global, peak-time TV, what would you say?

I’d probably do a quick talk about the energy situation. That’s the massive elephant in the room, that nobody’s talking about. Even with renewables, we’re not going to be able to run the world anything like we run it now. There’s a very different world coming, and we need to prepare for it. The longer we don’t prepare for it, the harder that crash is going to be. This means that there’s a huge opportunity for fascism, which is the really scary thing for me. If we don’t organise ourselves, a small group of powerful people wanting to capture what’s left of the value in capitalism are going to try to take over by force.

On that scary note, thanks very much Mark.

Highlights

1. There’s a crash coming. We need co-ops and co-operative practices in place to catch people.
2. The crash will probably be caused by a lack of an economically and energetically viable energy source to run society as it is now.
3. Keep co-ops small and networked, rather than growing huge co-ops. The separate co-operative societies for each town merged together – not a good idea.

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