From 83b76cc34d4513d7446778d5fd81298ac172c859 Mon Sep 17 00:00:00 2001 From: "Joshua G. Stern" Date: Fri, 1 Nov 2024 07:33:32 -0400 Subject: [PATCH 1/2] Add files via upload --- RFD0001.adoc | 2544 ++++++++++++++++++++++++++++++++++++++++++++++++++ 1 file changed, 2544 insertions(+) create mode 100644 RFD0001.adoc diff --git a/RFD0001.adoc b/RFD0001.adoc new file mode 100644 index 0000000..eae9a4f --- /dev/null +++ b/RFD0001.adoc @@ -0,0 +1,2544 @@ +*Why a Worker-First Software Cooperative?* + +*(RFD #2, Untitled Co-op)* + +“[T]he political realm rises directly out of acting together, the +‘sharing of words and deeds.’” Hannah Arendt, The Human Condition, p. +198 + +[arabic] +. {blank} ++ +____ +Introduction +____ + +A small group of founders develops some groundbreaking technology in a +garage. They attract investors who provide funds to scale the business +in return for significant ownership stakes. This revolutionary +enterprise then upends established incumbents, dominates the market, and +becomes enormously profitable. The investors reap huge gains upon exit, +and the founders, while not as enriched as the investors in absolute +terms, still do extremely well — perhaps even well enough to retire +early. Early employees also fare quite well. + +For those concerned about the immense wealth inequalities in the U.S., a +problem with this model is that everyone else does not share in this +prosperity. While tech workers _tend_ to be on the high__ish__ end of +the income distribution, it is often argued that the original vision was +not theirs, they did not risk much at the beginning, and so later +workers should not expect payouts comparable to those of the founders +and very early hires. The system is working, one might say. + +[arabic, start=2] +. {blank} ++ +____ +The Critical Importance of Integrated Decision-Making +____ + +Before getting into why the system is actually _not_ working, and how +maybe to fix some of it, we highlight a lesson from early American +business history: the principle of integrated decision-making. This +means that the same people who will execute decisions must be deeply +involved in making them.footnote:[Kenneth Hopper and William Hopper, The +Puritan Gift: Reclaiming the American Dream Amidst Global Financial +Chaos. I.B. Tauris, 2007 at 25.] This is not the same as democratic +voting. The Puritan settlers of Massachusetts Bay succeeded because they +spent months meticulously planning their migration before deciding +whether to proceed, with those who would implement plans being integral +to their development. They studied past failures, conducted pilot +projects, and made detailed contingency plans. Their success contrasted +sharply with failed settlements that made high-level decisions first and +worked out details later. This means: + +* {blank} ++ +____ +Decisions cannot be made "in principle" and handed off to others for +implementation +____ +* {blank} ++ +____ +Democratic voting is preceded by detailed planning by those who would +execute +____ +* {blank} ++ +____ +Every major initiative needs pilot testing before full deployment +____ +* {blank} ++ +____ +Study both successes and failures in similar efforts +____ +* {blank} ++ +____ +Maintain adequate reserves for contingencies +____ + +For a software organization, integrated decision-making could manifest +as "mob programming" (also known as ensemble programming or software +teaming), which is an engineering method explored by the Mob Mentality +Show (and +others).footnote:[. +See also Woody Zuill & Kevin Meadows, Software Teaming: A Mob +Programming, Whole-Team Approach. 2022.] This method involves the entire +team working together at a single workstation (physical or virtual), by +rotating through specific roles, primarily the 'typer' (or 'driver') who +operates the keyboard and the 'talker' (or 'navigator') who guides the +implementation. Other team members actively participate through +observation and discussion, creating a fluid, collaborative environment. +(We will explore in Sections 17 and 18 how the mob/ensemble practice +might extend beyond code to diverse aspects of business operations.) + +Consider a team implementing a feature to import data from Excel files. +During a session, team members cycle through different roles: typing, +talking, watching what the typer is doing, or listening to what the +talker is saying to the typer. The team includes people who regularly +work across different aspects of software development - testing, +operations, architecture, coding - as these aren't separate roles but +different facets of the work that any team member might engage in. + +While the session is happening, each person focuses intently on their +current role rather than trying to actively contribute from their +specialty. Yet their diverse perspectives - architectural design, +security, database optimization, systems operations - subtly inform how +they engage with the code, often in ways that aren't verbalized in the +moment. + +For instance, a security specialist probably would _not_ point out +vulnerabilities while typing, navigating, or listening (because their +attention would be on the task at hand). Instead, their security mindset +influences how they understand and work with the code. These different +perspectives and their influence on the work might only become apparent +during the end-of-day retrospective, or even the next day after team +members have had time to process what they learned. + +The mob programming practice could become particularly powerful when +applied to new initiatives through a two-stage Minimum Viable Product +(MVP) process. If workers were to propose a new system or process, they +would first secure democratic approval to allocate hours for MVP +development. These hours would come from their existing work time - no +specialized positions would be created. The same people proposing the +system would build it, ensuring that those who conceive an idea are also +those who will implement it. After MVP development, they would +demonstrate the working system to the general membership for a second +vote on whether to scale it. This pattern of concrete demonstration +followed by collective evaluation provides a reality-check against +unnecessary complexity. When people must show rather than just tell, and +when they must implement their own proposals rather than hand them off +to others, potential sources of bureaucratic bloat are naturally +prevented. And when questions about security, usability, or performance +arose, the relevant experts would have been immersed in the code's +evolution. + +The ensemble work pattern may be a way to restore the primacy of clear +communication, explainability, and dependability. The “Great Engine” +companies - DuPont, General Motors, AT&T, IBM and others that dominated +mid-20th century American industry - achieved this through hierarchical +structures, but modern communication technologies enable new +possibilities. Tools like Zulip's threaded discussions and Oxide's +Request for Discussion (RFD) system can create persistent, searchable +channels for decision-making and organizational memory, while mob +programming sessions provide real-time integration of knowledge and +capability. Together, these can potentially achieve what hierarchy +historically provided - clear information flow, effective coordination, +dependability, and explainability - but in a more democratic and +distributed way. + +However, such a project should avoid McCallum's error at the Erie +Railroad of trying to engineer human judgment out of the system. The +goal is not to create a perfect system that runs automatically, but +rather to enable human judgment to function effectively at scale. We are +trying to describe a plausible future, and our first guess at how to +achieve it, in light of the facts. When the facts change, we try to +realize that they changed, and change our beliefs. The technology, or at +very least the technology primitives, in principle already enable new +forms of organization; the bigger challenge is probably social. + +The ensemble/mob practice emerged from experimental work at Hunter +Industries in the early 2010s, where teams discovered that working +together continuously led to better design, better code, fewer defects, +and more engaged developers.footnote:[Zuill, Woody, and Kevin Meadows. +"Mob programming: A whole team approach." Agile 2014 Conference, +Orlando, Florida. Vol. 3. 2016. +] +Rather than the traditional cycle of individual work followed by code +review, mob programming enables continuous review and improvement. This +real-time collaboration often prevents problems that would be costly to +fix later. It also encourages a state of "team flow", where a group +works smoothly togetherfootnote:[Zuill & Meadows, 2022 at 163.], +addressing issues as they arise and making decisions in real-time. + +Mob programming directly implements the principles of integrated +decision-making: + +* {blank} ++ +____ +Decisions cannot be separated from implementation - they happen +simultaneously +____ +* {blank} ++ +____ +Every major initiative undergoes continuous pilot testing as the team +works (e.g. via “Test Driven Development”) +____ +* {blank} ++ +____ +The ensemble studies both successes and failures in real-time +____ +* {blank} ++ +____ +The team maintains shared context about decisions and their implications +____ + +This practice could form the foundation for many aspects of enterprise +operations, from software development to financial planning to +governance. + +[arabic, start=3] +. {blank} ++ +____ +The Problem with Wealth Super-Inequality in Tech +____ + +The insiders who became extraordinarily wealthy in the Introduction were +not proportionately instrumental to the business's success. To be fair, +they were _somewhat_ more responsible. And if not for their founding, +the business probably would not exist, nor, quite possibly, would any +analog. But this historical contingency does not mean the +founders/insiders are infinitely more responsible than employee number +11,781. They are not even 20-fold more (pro rata) responsible. It is not +that the insiders' remuneration is unearned, but rather that their +_exorbitant_ remuneration is unearned. Not all, but _most_ of their +excess fortune has no justification other than them having been in the +right place at the right time. Early-life decisions — whether of a +company, a career, or a mammal — are generally more consequential than +later ones; timing often outweighs who is making the decision or the +singular flair with which they made it. + +Some argue that without the lure of huge rewards and the taking of huge +risks, the economy would not be as successful and productive as it is. I +do not buy this. Why should we incentivize anyone to risk personal +bankruptcy? There are more humane ways to encourage people to +experiment.footnote:[Such as funding more five-year graduate +fellowships. Their humaneness is a mixed bag, depending greatly on the +local academic environs, but their stipends typically cover basic living +expenses. Stipulating and enforcing portability for such fellowships +could significantly improve working conditions for early-career +researchers.] Without exorbitant rewards, people might pull fewer +all-nighters, yes. We might have fewer celebrity CEOs. "Shark Tank" +might have a smaller viewership. But these are not meaningful proxies +for, or contributors to, success or productivity or innovation. There is +nothing wrong with occasionally staying up all night, but making it a +habit is almost always unwise — and pressuring others to do so, even +indirectly through cultural norms that celebrate such behavior, is +thoroughly stupid. Grinding boosts short-term productivity — but harms +it in the long term.footnote:[Unless, of course, we expand our +definition of 'productivity' to include the medical goods and services +employed to treat the chronic and acute health issues caused by the +"grind culture" imposed upon workers. More concretely, if a worker has a +heart attack, that is easily an extra $10,000 of 'productivity' due to +the medevac alone!] Exorbitant rewards both exacerbate inequality and +encourage overwork. + +[arabic, start=4] +. {blank} ++ +____ +Challenging the Winner-Take-All Mindset +____ + +The problem with this __uber-capitalist__footnote:[See It’s OK to be +Angry About Capitalism by Bernie Sanders, 2023] bias is not only that +disproportionately rewarding first movers is unnecessary, unfair, and +unhealthy. This incentive structure also perpetuates cults of +personality and authoritarian dynamics. It normalizes a +_winner-take-all_ mindset, which in turn drives a _win-at-all-costs_ +mindset. For if the winner takes all, the losers are left with nothing. +As Peter Thiel infamously observed, competition is the last thing +capitalists wantfootnote:[Peter Thiel, Competition is for Losers, Wall +Street Journal. 12 Sept 2014. +https://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536]. +They seek moats, monopolies, monopsonies, and chokepointsfootnote:[Cory +Doctorow & Rebecca Giblin, Chokepoint Capitalism: How Big Tech and Big +Content Captured Creative Labor Markets and How We'll Win Them Back. +2022, Beacon Press.] — maximizing profit and minimizing +effort.footnote:[That said, as Frederic S. Lee demonstrates in Heterodox +Microeconomics (2017), a fine line often exists between predatory or +abusive pricing behavior and the practices firms use in reasonable +market governance to sustain themselves as going concerns — a topic we +will revisit in sections 6, 8, 18, and 19.] + +Relentless winner-take-all growth is unhealthy. Meanwhile, immense +wealth is not even a great incentive for the next big thing. The +possibility of immense wealth might have helped give us our tech +darlings, but it also gave us our tech deplorables, like Theranos and +FTX. Good ideas are not a finite resource, nor do people get bored of +creating them. Winner-take-all might have summoned impressive individual +efforts in the past, but that does not mean it was the only or best way. +Think, for example, of separate clinical and preclinical tests in +separate corporate silos proceeding and failing — independently, in +isolation, and in ignorance.[multiblock footnote omitted] This +inefficiency is exacerbated by the current patent system and +financialization of the pharmaceutical industry, which often prioritize +short-term financial gains over long-term innovation and public health +outcomes. These systemic inefficiencies in pharmaceutical innovation are +signs of deeper and broader pathologies in how we approach complex +global issues. With 1.5 °C of warming baked into the climate cake, we +must today rise to an occasion piled far higher with difficulty than we +have been past accustomed to. + +We see evidence of the winner-take-all mentality in, e.g., the Microsoft +portfolio of companies and their business models, as well as in the +licensing and trademark-related behavior of other software companies and +cloud providers such as[multiblock footnote omitted] HashiCorp, MongoDB, +Amazon AWS, Elastic, and Redis. In the case of Microsoft, the bare facts +of (1) a large ownership stake in OpenAI, (2) full ownership of GitHub, +and (3) what seems an unfathomably large subscriber base for Office 365 +from US Federal agencies (not to mention the private sector) should be +sufficient to dismay any advocate of software freedom, individual +privacy, and healthy competition. More explicitly: if you are bothered +that companies like Google and Amazon use your browsing, searching, and +purchasing habits to try to sell you more stuff, just wait until +companies start deploying Large Language Models (LLMs) for similar (or +worse) purposes. Have you seen how quickly ChatGPT can generate an +accurate summary of a book-length document? Imagine this capability +deployed at scale and pointed at not just analyses of keywords and URL +visit patterns, but rather the actual semantic content of the sites we +visit and the ideas we type. + +GitHub is a fabulous and extremely useful tool. And currently, it plays +a valuable societal role in affording software commons. However, +anything that gets publicly committed to GitHub is fair game for OpenAI +to leverage in improving its LLMs; when combined with OpenAI’s formal +partnership with GitHub Copilot, it is difficult to regard OpenAI’s +relationship to GitHub data as anything less than one of privilege. This +is the sort of “moat” or “flywheel” that venture capitalists love. It is +a self-reinforcing process that situates GitHub and OpenAI as the +platforms of choice due to their superior adoption and training data. +However, with apologies to George R. R. Martin, this particular +flywheel, which answers mostly to oligarchs and their sycophants, needs +breaking rather than turning.footnote:[In the hybridized spirit of +idealism and pragmatism that this RFD hopefully embodies, the PR for +this RFD is a “cross-post” of the one hosted in the Codeberg repo. The +idealist part is that the primary repo is with Codeberg; the pragmatic +part is that I have made no attempt at some sort of automated +integration of the two separate discussion spaces.] + +[arabic, start=5] +. {blank} ++ +____ +A Hypothetical Software Cooperative +____ + +A new software cooperative could initially organize itself around +principles of a worker-first second-degree cooperativefootnote:[Also +known as a _second-order_ cooperative, a _second-tier_ cooperative, or a +_multistakeholder (MSC)_ cooperative.], while remaining open to +structures and relationships that may arise through its operations, to +the extent that they do not diminish worker primacy.footnote:[Rather +than prescribing specific complementary organizations, educational +initiatives, and mutual aid funds, the cooperative could create +conditions for such elements to grow organically with members' +interests.] This approach, although inspired by Mondragón's +evolutionfootnote:[Ramon Flecha & Ignacio Santa Cruz, Cooperation for +Economic Success: The Mondragón Case. Analyse & Kritik, pp 157–170. Jan +2011.]^,^footnote:[Imaz, Freundlich, and Kanpandegi; chapter 10 in S. +Novkovic et al. (eds.), Humanistic Governance in Democratic +Organizations, Humanism in Business Series, 2023.], recognizes that the +cooperative's true form and function will develop through complex +interactions among membersfootnote:[Ralph D. Stacey and Chris Mowles, +Strategic Management and Organisational Dynamics: The challenge of +complexity to ways of thinking about organisations, 7th ed. 2016. At +189.] and with a broader (and sometimes hostile) environment. + +An example of the second-degree structure in Mondragón is Ikerlan, a +technology research and development cooperative founded in 1974. +Ikerlan's governing membership comprised both workers and +user-customers. Initially, the user-customer members were other +Mondragón cooperative firms, “though later, conventional firms were also +admitted into this stakeholder group.”footnote:[Ibid at 300.] + +Adopting a second-degree cooperative structure similar to Ikerlan's +could allow the cooperative to establish formal relationships with other +organizations from the outset, potentially including other tech +cooperatives, ethical tech companies, or non-profit organizations that +could benefit from the cooperative's software. These organizations would +become members of the cooperative (alongside the electorally-prioritized +worker-members), providing, potentially, market access, +structurally-constrained financial support, and a built-in user base for +the software being developed. + +The cooperative's financial structure should be designed from inception +to support both democratic principles and operational resilience through +multiple mechanisms: initial worker-owners would contribute capital +according to their means (subject to a ceiling), while ongoing capital +accumulation would be linked to hours worked rather than initial buy-in; +mandatory contributions to indivisible reserves would be built into +cost-plus pricing methods to provide buffers against market pressures; +and transparent systems would track both collective and individual +capital accounts, with workers accumulating withdrawable equity through +hours worked while a portion of surplus goes to collective reserves. + +To incentivize user-member participation, the cooperative could offer +(necessarily constrained) voting rights, as well as patronage dividends +based on usage or a special class of membership shares.footnote:[One +idea for aligning individual member incentives with a cooperative +network's long-term success is implementing a single utility token +system. In this system, members would exchange (e.g.) dollars for tokens +at a centrally determined rate, using these tokens to purchase equity in +any affiliated cooperative. Dividends would be calculated based on +percent equity and paid out in dollars. The token could also be used to +purchase products or services from member cooperatives, at their +discretion. The idea here would be to create a semi-closed micro-economy +that reinforces cooperative principles while providing an attenuated +sort of internal liquidity. The token's price, being centrally managed, +would be insulated from external market volatility. Members could only +"cash out" by selling tokens back to a network-operated agent, and +subject to various constraints. While not offering direct price +discovery, this system could provide insights into cooperative health +through metrics like equity demand, dividend yields, and token +velocity.] This approach, after Arizmendiarrieta, seeks to align user +interests with the cooperative's long-term success while maintaining +worker control.footnote:[While transparency can help identify conflicts +of interest and external influences, complete transparency may not +always be desirable, as Buterin (2022 at 319) argues. Cooperatives could +implement sufficient transparency for accountability while protecting +individual privacy where needed. This might involve using cryptographic +techniques similar to those used in some blockchain systems, allowing +verification of important information without revealing all details.] +This structure could be fortified by embedding protections against +service degradationfootnote:[The technical term for this is +_enshittification_. It is vividly exemplified by the Muskification of +Twitter/X. See Cory Doctorow, Pluralistic: Leaving Twitter had no effect +on NPR's traffic, 14 Oct 2023. +] and user +exploitation in the cooperative's founding documents. These would +establish legally binding user rights, including privacy, quality of +service, and fair treatment, making it constitutionally challenging for +the cooperative to engage in practices that undermine user interests or +platform quality. + +Alongside this structure, the cooperative could develop educational +programs in their software niche. This reflects Mondragon's origins, +which began with Arizmendiarrieta's vocational training school in 1943. +The software cooperative could hold regular skill-sharing sessions or +develop online courses. The goal would be to foster a community of +skilled individuals and cultivate a shared vision and set of values. + +Education is a key interface to democracy. And just as the User +Experience of software is enormously important for its adoption, the +Developer Experience is crucial to the adoption of a tech stack. A +software cooperative ought to be keenly attuned to the user/developer +experience of its members as they interact with the cooperative in all +senses. In software development, long cycle times (e.g. the time between +coding a feature and finishing the automated test suite, or +alternatively, the time between merging to main and being live in +production) are a red flag suggesting a subpar developer experience. +Maintaining a vibrant cooperativist spirit will probably involve an +analogous sensitivity to the developer-practitioner-user experience of +democracy. There are many different ways to have a meeting or +deliberative session (e.g. asynchronous vs. synchronous). *Finding the +right formats for the situation will probably be important. And the +situation will often be different from “last time”.* + +The experiences of Mondragón — and recent events at OpenAI — highlight +the importance of informed and critical thinking in organizational +culture. In Mondragón, shifts in managerial ideology towards +'efficiency' (in parallel with the broader advent of neoliberalism) +created tensions with the cooperative's founding principles. In their +1996 book, Kasmirfootnote:[Sharryn Kasmir, The Myth of Mondragón: +Cooperatives, Politics, and Working-Class Life in a Basque Town. June C. +Nash, Editor. State University of New York Press, Albany, 1996.] notes +that "managers [had] shed their cooperativist ideology in favor of an +'efficiency' ideology," arguing for more "economistic or capitalistic +changes." This ideological shift undermined the cooperativist spirit, +and had it not been challenged, could have been devastating. + +Complementarily, recent OpenAI leadership drama demonstrates the +potential pitfalls when workers lack the full context for major +decisions. When OpenAI's board of directors briefly removed Sam Altman +from his role as CEO in November of 2023, most employees reacted based +on immediate concerns and personal +loyaltiesfootnote:[https://web.archive.org/web/20241006075739/https://www.wired.com/story/openai-staff-walk-protest-sam-altman/], +potentially overlooking deeper +ethicalfootnote:[https://perma.cc/M8FZ-2BET]^,^footnote:[https://perma.cc/8BCR-6XKJ] +or strategic issues that might have motivated the board's actions. + +The cooperative could establish or join a mutual aid fund among its +network of member organizations and independent developers. This fund, +inspired by Mondragón’s Lagun Aro social welfare systemfootnote:[Flecha +& Santa Cruz, 2011], could serve as a partial financial safety net. Each +member would contribute a small percentage of their monthly revenue or a +fixed amount, and the fund would be cooperatively managed. It could be +used for providing short-term loans or covering unexpected expenses. + +In addition to these formal structures, the cooperative could develop +'unwritten rules' to guide decision-making processes, particularly when +dealing with complex multi-stakeholder issues. These informal practices +could help balance the interests of different stakeholder +groupsfootnote:[Imaz, Freundlich, and Kanpandegi, 2023]. For example, +when a decision primarily affects one group of members (such as workers +or users), other stakeholders could voluntarily step back from the +decision-making process, allowing those most impacted to have a stronger +voice. This flexible approach, as seen in Mondragón cooperatives like +Ederlan Tafalla, Eroski, and Caja Laboral (now Laboral Kutxa), can help +maintain democratic principles while addressing practical challenges +that arise in multi-stakeholder organizations. These unwritten rules +would not replace formal governance structures but would complement +them, providing a cultural framework for collaborative decision-making. + +Financially, this structure could provide a foundation for the new +cooperative. Member organizations could contribute capital, either +through membership fees or by purchasing shares. + +As these various components matured and proved their value, they could +become more comprehensive. The educational initiative could become a +recognized training program or even partner with existing institutions, +the mutual aid fund could develop into a chartered +bank[multiblock footnote omitted], and the second-degree cooperative +structure could expand to include a wider network of organizations. + +[arabic, start=6] +. {blank} ++ +____ +The Case for Worker-First Software Cooperatives +____ + +To address concerns about technology concentration and the potential +misuse of advanced technologies like LLMs, +cooperativesfootnote:[Worker-owned cooperatives are not new. From the +early Christian communities described in the Book of Acts, through +medieval guilds and monasteries, to the Rochdale Pioneers of the 19th +century, cooperative models have a rich history of providing +alternatives to dominant economic structures (Schneider, 2018). The +International Cooperative Alliance (ICA) traces the modern cooperative +movement back to 1844 (ICA, 2015, , p ix). +Software cooperatives can build upon this legacy.] could develop +open-source technological infrastructure, while understanding Frederic +S. Lee's concepts of market governancefootnote:[Frederic S. Lee, Ed. +Tae-Hee Jo, Microeconomic Theory: A Heterodox Approach. London and New +York: Routledge, 2017 at 66.]. As outlined above, a multi-stakeholder +approach provides a model — combining a second-degree cooperative +structure with educational initiatives and a mutual aid fund. However, +the complexity of balancing multiple stakeholder interests, maintaining +democratic processes at scale and longitude, and competing in a market +dominated by traditional corporate structures could present significant +hurdles. While cooperatives can offer promising alternatives, they are +not a panacea and will require ongoing adaptation and reflexive +operationfootnote:[Stacey & Mowles at 500]. + +The potential market for such cooperative ventures is significant; +platforms like GitHub boast over 100 million usersfootnote:[James +Governor, State of Open: 100m and counting. A UK conference that +matters. RedMonk, February 6, 2023.] as of 2023. We should also note +that enterprise adoption is often key to long-term success.footnote:[See +generally James Governor, Open Source Foundations Considered Helpful, +RedMonk, September 13, 2024. This article’s emphasis on enterprise trust +and adoption (via CNCF as described therein) implies that it is a key +factor in the long-term success and sustainability of open source +projects.] Alongside individuals and other worker-first cooperatives, +software cooperatives could market to larger enterprises with +sympathetic values, e.g., B Corporations. + +For example, a federation of software cooperatives could collaboratively +create and maintain open-source platforms analogous to +GitHub.footnote:[Some GitHub alternatives, such as Codeberg, already +exist.] These platforms would be designed to better accommodate +collaborative ownership models. Or, cooperatives could unite to develop +artificial intelligence technologies that prioritize explainability, +dependability, and alignment with public interest over corporate profit +motives. By applying production analysis techniques, and +inter-cooperative governance structures, cooperatives can ensure these +technological projects are economically viable and competitive with +traditional alternatives. + +This approach both addresses practical concerns and challenges +fundamental economic assumptions. By questioning assumptions such as +perfect information in markets and profit maximization as the path to +optimal social outcomes, cooperatives can articulate a vision of +economic value that includes social and environmental factors. This +critical perspective enables cooperatives to justify their alternative +approaches not just as ethical choices, but as economically sound +strategies for creating sustainable, democratic workplaces. In doing so, +they can advocate for federal and state policy changes that recognize +and support their structures. + +Even within a cooperative organization, dynamics will remain complex, +and will require adaptability and responsiveness to the often unplanned +realities of day-to-day operations. This means setting the stage(s) for +ongoing reflection and adjustment, where members are attuned to the +evolving patterns of their interactions and ready to modify structures +and practices as needed.footnote:[Stacey and Mowles at 447] At the +ensemble/shop/small-team level, a post-session retrospective may be +useful.footnote:[In a retrospective, the ensemble asks itself questions +such as "’Should we do more of what went well? Should we change what +didn't go well?’" Zuill & Meadows, 2022 at 25.] At the same time +(particularly in a remote work context): “Prefer action over endless +debate. We try it as soon as we have an idea instead of continuing to +debate it.”footnote:[Zuill & Meadows, 2022 at 110.] This nuanced posture +toward deliberation could build resilience and avoid the pitfalls of +rigid thinking and fixed mindsets. + +As software cooperatives develop alternative economic structures, they +should also recognize the current shift towards higher-level +abstractions, integrated developer experiences, and +Platform-as-a-Service (PaaS) in cloud offeringsfootnote:[Stephen +O'Grady, What AWS Tells Us About Heroku 2.0. RedMonk, June 23, 2021]. By +focusing on PaaS solutions, the cooperative could foreground user +experience while implementing a transparent, cost-plus pricing model. + +[arabic, start=7] +. {blank} ++ +____ +Imagine ubiquitous self-awareness, attention to detail, curiosity, and +cognitive flexibility +____ + +The evolution of Mondragón's structure illustrates why education and +continuous learning and exploration must be core to a software +cooperative. As Kasmir details, Mondragón grew from individual +cooperatives into a complex network with a Cooperative Congress. This +centralization was driven by the need to respond to economic crises and +increased competition from Spain's entry into the European Economic +Community. However, some workers perceived this shift as a "dissolution +of democracy," feeling that decision-making power was moving further +away from the shop floor. This (arguably context-specific) tension +between organizational efficiency and grassroots democratic control +parallels challenges in modern tech companies. At OpenAI, for instance, +the rapid growth of the company and the high-stakes nature of AI +development led to a governance crisis that the majority of employees +were ill-equipped to critically evaluate. + +Critical thinking is not just about developing individual skills, but +about creating organizational cultures and structures that encourage +healthy skepticism and thorough analysis. In Mondragón, workers +mobilized against attempts to widen salary disparities, demonstrating +the potential power of an engaged and thoughtful workforce. However, the +OpenAI situation reminds us that collective action, while powerful, +needs to be grounded in comprehensive understanding and careful +deliberation. In both cases, we see the need for organizational +structures that not only allow for democratic participation but also +ensure that participants have the knowledge and presence of mind to make +informed decisions about complex issues. + +These examples underscore the need for transparency, continuous +learning, and robust mechanisms for debate and dissent. They challenge +us to think about how to balance expertise with broad participation, how +to cultivate leadership that facilitates rather than dominates, and how +to ensure that democracy and solidarity can withstand rapid changes in +technological and animal spirits. + +Understanding how and why to build alternative economic structures +requires understanding the mutually reinforcing processes of capitalism +and racism - from the transatlantic slave trade to modern-day labor +market segmentation. Any attempt to create a more equitable economic +model must learn this history and its ongoing damages. For a software +cooperative, this could mean a journal or book club during work hours. +Such a forum could provide a space for members to engage with +contemporary scholarship that analyzes issues of racial justice through +a lens of racial capitalism. It might begin with Part One of +[.underline]#Resisting Borders and Technologies of +Violence#.footnote:[Mizue Aizeki, Matt Mahmoudi, and Coline Schupfer, +eds., Resisting Borders and Technologies of Violence, New York, NY: +Haymarket, 2024] Through readings and discussions, members could learn +how racism continues to shape the tech industry and the broader +political economy. + +[arabic, start=8] +. {blank} ++ +____ +Economic Analysis of Cooperative Models +____ + +While working to actualize alternative economic models, cooperatives +navigate existing market realities. Lee's (2017) market analysis reveals +why enterprises cannot survive through price competition alone - they +must develop governance mechanisms to ensure stable sequential +production.footnote:[Lee at 142] In other words: to stay in business, an +enterprise must continuously advance funds to buy inputs and pay +workers, then recover these costs through sales, only to advance funds +again for the next production period. This cycle must generate enough +revenue to not only cover costs but also maintain necessary reserves and +fund growth. If prices fall too low, or if the cycle is interrupted, the +enterprise cannot continue operating. Traditional firms develop +governance mechanisms like trade associations to prevent destructive +price competition from breaking this cycle. The second-degree +cooperative structure proposed earlier could enable similar market +stabilization while democratizing its implementation. It could help +reveal the complex dynamicsfootnote:[An examination of market governance +could involve studying pricing mechanisms, entry barriers, and control +structures within the industry. It could analyze how changes in pricing +affect the quantity of products or services sold (studying market demand +curves). It could use tools like the Herfindahl-Hirschman Index (Lee at +156) to assess the level of competition and identify potential +collaborators or competitors.] and structures shaped by established +players without replicating their monopolistic practices. In developing +such structures, cooperatives could find strategies to operate within +them and potentially reshape themfootnote:[Tankus, Nathan and Herrine, +Luke, Competition Law as Collective Bargaining Law (May 5, 2022). +Cambridge Handbook of Labour in Competition Law, Cambridge University +Press (2022), Available at SSRN: https://ssrn.com/abstract=3847377.]. + +This perspective aligns with Zhang et al.'s (2024) +findingsfootnote:[Zhang, J., Zamani, E. D., Gerli, P., & Mora, L. +(2024). Co-constructing cooperative value ecosystems: A critical realist +perspective. Information Systems Journal, 1–41. +https://doi.org/10.1111/isj.12549] on digital platform cooperatives +(DPCs). Their study identifies "co-constructing cooperative value +ecosystems" as a core category, emphasizing how DPCs are actively +creating new economic structures rather than simply operating within +existing ones.footnote:[Zhang et al.'s study identifies generative +mechanisms such as "collective identity and empowerment" and +"government-community symbiosis," illustrating how cooperatives can +foster change through both internal dynamics and external relationships. +Their focus on contextual conditions, including "grassroots mobilization +and advocacy" and "legislative frameworks for cooperative integration," +underscores the role of human agency and institutional structures in +shaping economic change.]^,^footnote:[The cooperative model could +potentially offer slower and steadier growth by maintaining strong +open-source principles. This approach could be particularly attractive +in the "Post-Valkey World," (Stephen O'Grady, +) where +there's increasing concern about the stability of open-source licenses.] +However, these structures must enable the cooperative to maintain +sequential production - generating sufficient revenue to cover costs and +fund continued operations while building necessary reserves. + +Cooperatives are not immune to external pressures and influences. In the +late 1980s, the impact of neoliberal and technocratic impulses was +tangible on the Mondragón shop floor. As one worker in Clima recounted: +"They said they were coming to organize the factory. They said Clima +would get seventy-five million pesetas more [a year] just by +reorganizing. They said that, on average, people had to increase +productivity by 18 percent. Some people had to increase 30 percent. They +said they were not going to make us work faster, just cut out dead +times." The pursuit of efficiency could lead to increased work +intensity, potentially undermining the cooperative's original goals of +worker empowerment and wellbeing. + +Kasmir (1996) describes how Arizmendiarrieta saw education as key to +"the emancipation of a class or of a people." However, in light of +recent experiences, we might expand this vision of education beyond +technical skills to include critical analysis of organizational +structures, ethical implications of technology, and the complexities of +governance. + +While cooperatives aim to advance social democracy, complex economic +systems cannot be fully controlled or predicted. Cooperatives could +adopt flexible approaches like cost-plus pricingfootnote:[A cost-plus +pricing approach could use the formula: p = EATC~B~ × (1 + r), where p +is the price, EATC~B~ is the enterprise average total cost at budgeted +capacity utilization, and r is the markup rate collectively determined +by the cooperative (see Lee at 159). The markup r would be established +through democratic processes, considering factors such as desired +reinvestment, community contributions, and fair worker compensation.]. +This approach aims to cover costs and generate profits for reinvestment, +worker benefits, and community initiatives.footnote:[The International +Cooperative Alliance (ICA) provides guidance on how cooperatives handle +financial matters, including raising capital, dealing with surpluses, +and managing reserves (ICA, +, +p 29, 2015). Software cooperatives could adapt these principles; they +might establish indivisible reserves to ensure long-term stability, or +develop innovative ways to raise capital, such as member investment +accounts or community shares. While engaging with larger tech ecosystems +and seeking funding, software cooperatives must vigilantly maintain +their autonomy (ICA, p 46, 2015). This might mean carefully structuring +partnerships with tech giants, ensuring that any external investments +come without voting rights, and maintaining majority member ownership +and control in all circumstances.] + +Cooperatives could form (or join preexisting) inter-cooperative +associations or federations inspired by traditional trade associations. +These structures could facilitate knowledge sharing, enhance market +influence, and promote ethical practices[multiblock footnote omitted]. +Unlike traditional trade associations that often prioritize profit +maximization, cooperative federations could balance economic viability +with societal goals.footnote:[This vision for inter-cooperative networks +builds upon a long tradition of cooperative federations. From medieval +guilds that set standards across towns to the International Cooperative +Alliance (ICA) formed in 1895, cooperatives have long recognized the +power of collaboration (Schneider, 2018). The ICA provides examples of +how cooperatives work together through federations and apex +organizations (ICA, 2015, , p 25). +Inter-cooperative governance structures could help address challenges of +coordination and competition. In the tech industry, this could manifest +as collaborative software development platforms.] + +While cooperatives offer promising alternatives to traditional business +structures, they operate within a broader economic and environmental +context that presents challenges. Since combustion engines became +widespread ~ 265 years ago, humans have sunk ~ 145 ppm-worth of CO~2~ +into the Earth’s atmosphere. Beneath these dry numbers is breathtaking +damage. Taking stock of the damage reveals that our individual +arrangements — e.g., our 401(k) accounts — intertwine with the global +infrastructure of fossil fuel extraction and combustion. + +The venture capitalist — anyone with a 401(k) — is perpetually in search +of their exit. There is no exit, and there is no outside. We are always +already part of an interconnected web of social, economic, and power +relationships.footnote:[Michel Foucault, _The History of Sexuality, +Volume 1_. See also Ballerinas on the Dole with Colleen Hooper, Money on +the Left. +https://moneyontheleft.org/2022/02/08/ballerinas-on-the-dole-with-colleen-hooper/]^,^footnote:[Worker-owners +should have a mechanism to “cash out” their equity, albeit through much +more constrained transaction volumes than the NYSE. In other words there +could be limits on transaction volume, size, timing, counterparty, +counterparty reserve level, and so on. Counterparties could be +restricted to affiliated cooperatives, or a single agent representing +the full cooperative membership.] Thinking that we can opt out of the +consequences of our choices — even the ones long ago made by “others” — +is delusional. + +Worker-owned cooperatives could be part of a reinvigorated public sphere +and civil society. As macroeconomists have pointed out,footnote:[William +Mitchell, “There is no need to issue public debt”, Blog post, 3 Sept +2015. +. +See also William Mitchell, L. Randall Wray, and Martin Watts, +Macroeconomics. Red Globe Press, 2019 at 499. See also ibid. at 533.] +monetary sovereigns can fund public programs like Social Security +without relying on debt issuance or the whims of financial markets. +Social Security (or an analogous public mechanism) could, therefore, +provide for retirees everything that the 401(k) does — even if every +publicly-traded company decided to go private and IPOs stopped +happening. Relying on speculative investments for retirement security is +both precarious and unnecessary when public solutions are +available.footnote:[To illustrate how this scenario is more plausible +than you might think, consider TreasuryDirect. This national institution +serves retail customers on a daily basis. TreasuryDirect could +automatically set up an account for every US person who does not already +have one. Similar to how it did for the Consumer Financial Protection +Bureau, Congress could authorize sufficient dollar transfers from the +Board of Governors of the Federal Reserve System in perpetuity for +TreasuryDirect to match savings deposits at 1:1, 2:1, 3:1, or any +multiple necessary for that saver to have a dignified retirement. (This +would involve amending Title 31 [Treasury], Title 26 [IRS data sharing], +and the Federal Reserve Act.)] + +Cooperatives present an alternative to traditional business structures +by distributing ownership among those who contribute their labor (and +there are far more types of labor than are typically acknowledged). This +distribution could influence, but would hardly control, complex +macroeconomic outcomes! Cooperatives should aim to equitably distribute +wealth in a constitutively high-demand, tight-full-employment, +guaranteed-jobs economy,footnote:[Pavlina R. Tcherneva, The Case for a +Job Guarantee. Polity, 2020.] and contribute to a green “just +transition”footnote:[Analogously during World War 2 in the US, labor +unions were important to keeping profit margins and executive +compensation in check; this is why the benefits of running the economy +hot did not all accrue to the already-wealthy.]. However, the actual +results cannot be precisely engineered; they will emerge from countless +local interactions, against a Federal Government fiscal policy backdrop +of formidable influence. + +Reimagining economic structures through cooperatives and other forms of +public power challenges the idea that current configurations are +inevitable or optimal.footnote:[Following is another example of a +suboptimal status quo. Given all that needs repair, the idea that +_involuntary_ unemployment is sometimes _necessary_ for the greater good +of inflation control seems more than a little preposterous. In other +words, people eager to work are being turned away because, supposedly +and incomprehensibly, nobody in their community can find anything for +them to do (or they could, but if they did, it would blow up the price +of gasoline and eggs).] The historical approach of critical +realist-grounded theory supports this challenge; the approach recognizes +that economic structures are historically contingent and shaped by human +decisions and actions. As Lee argues, historical change is not +predetermined or cyclical, nor does it follow any grand narrative or +inevitable path. Instead, it is open-ended and can take various forms; +it “can just only be change.”footnote:[Lee, 2017, p 30.] + +[arabic, start=9] +. {blank} ++ +____ +Maintaining Solidarity and Labor Connections +____ + +Mondragón's history underscores the importance of maintaining +connections with broader labor movements and fostering internal +solidarity, even as organizations grow and evolve. As Kasmir notes, +"After the Ulgor strike [leaders were fired via a majority vote], +cooperators had the reputation of not expressing solidarity with the +rest of Mondragón's working class, and they were seen as increasingly +isolated in their own privileged work world." + +The 2013 collapse of Fagor Electrodomésticos provides crucial lessons +about how solidarity can become dysfunctional when separated from +integrated decision-making processes. As Ortega and +Uriartefootnote:[Ortega Sunsundegi, I., & Uriarte Zabala, L. (2015). +Reios y dilemas del cooperativismo de Mondragón tras la crisis de Fagor +Electrodomésticos. LANKI, Instituto de Estudios Cooperativos, Mondragon +Unibertsitatea. Retrieved from http://www.lanki.coop] (2015) explain: + +"Se puso excesivo énfasis "Excessive emphasis was placed + +en el aspecto jurídico de on the legal aspect of + +la participación en disputas participation in assembly + +de asamblea y muy poco en disputes and too little on + +la fertilidad creativa de the creative fertility of + +la participación del worker participation in the + +trabajador en el propio workplace itself." + +puesto de trabajo." + +This separation between formal participation and workplace integration +became particularly problematic during the 2007-8 financial crisis, when + +"la caída del 65% del mercado "The 65% collapse of the Spanish + +español provoca una reducción market caused a reduction in + +en la facturación de FED de Fagor Electrodomésticos' revenue + +800 millones de euros (de los of 800 million euros (from + +1.800 millones de euros en 1.8 billion euros in sales + +ventas alcanzados en el 2006 achieved in 2006 to 1 billion + +a los 1.000 millones de euros in 2008)" + +euros en 2008)" + +The crisis exposed how managerial structures had gradually separated +from democratic governance, creating conditions where worker solidarity +became defensive rather than constructive. This organizational +separation reflected deeper ideological transformations. As Ortega and +Uriarte explain, the cooperative experienced a fundamental shift in how +workers conceived their relationship to the enterprise: + +"En estas nuevas condiciones "Under these new conditions + +se afirma que el pensamiento it is affirmed that cooperative + +cooperativista entra en thinking enters into decline + +declive y las influencias de and the influences of what + +lo que algunos han llamado some have called 'fordist + +'la izquierda fordista' son left' are palpable in this + +palpables en este sentido. sense. This is a culture of + +Es esta una cultura de la the left that expands in the + +izquierda que se expande en phase of welfare capitalism, + +la fase del capitalismo del for whom the factors of + +bienestar, para quien los economic development are a + +factores del desarrollo given fact that doesn't merit + +económico son un hecho dado too much attention, and that + +al que no merece la pena centers its action on a + +prestar demasiada atención, demanding dynamic in pursuit + +y que centra su acción en of greater conquests and + +una dinámica reivindicativa rights for the working class + +en pos de mayores conquistas in the struggle for the + +y derechos para la clase distribution of generated + +trabajadora en la lucha por economic wealth." + +el reparto de la riqueza + +económica generada." + +This shift toward what the authors call "fordist left" thinking is +particularly significant - workers began to see themselves as labor in +opposition to management rather than as integrated worker-owners +collectively responsible for the enterprise's sustainability. Rather +than engaging with the complex dynamics of maintaining a cooperative +business, worker consciousness shifted toward a more traditional model +of claiming rights and benefits from an apparently separate management +structure. This ideological separation reinforced and was reinforced by +the growing operational divide between technical and social governance. + +The global financial crisis not only devastated sales but exposed deeper +cultural transformations within the cooperative. As Ortega and Uriarte +explain: + +"Este proceso coincide, a su "This process coincides with + +vez, con el relevo de la the replacement of the first + +primera generación de generation of directors by a + +directores por una nueva new generation with a 'more + +generación de perfil 'más technocratic' profile, where + +tecnócrata' y en el que el the charisma and leadership + +carisma y la capacidad de capacity attributed to + +liderazgo que se atribuyen previous generations were + +a las generaciones becoming diluted." + +anteriores se van diluyendo." + +This transition led to what some veteran members characterized as +"cooperativismo neoliberal": + +"el pensamiento cooperativista "cooperative thinking enters + +entra en declive y se abre into decline and gives way + +paso a 'un sistema to 'a neoliberal cooperative + +cooperativista neoliberal' system' in which people + +en el que la gente empieza begin to think more about + +a pensar más 'en la cartilla, 'the bankbook, about money, + +en los dineros, en los about interest rates and + +intereses y no en la not about the cooperative.'" + +cooperativa.'" + +The solidarity mechanisms of the broader Mondragón network, while +well-intentioned, may have inadvertently enabled this dysfunction. +According to one cooperative manager: + +"todas estas ayudas no han "all this aid may have had + +tenido un efecto anestésico, an anesthetic effect, in + +en el sentido de que han the sense that they have + +evitado una reacción más prevented a more forceful + +contundente por parte de reaction from the cooperative, + +la cooperativa, y el and the thought that if + +pensamiento de que si there had been somewhat less + +hubiera habido hace años solidarity years ago, they + +algo menos de solidaridad might have acted, perhaps, + +se hubiera actuado, quizá, in a more responsible way + +de una manera más pushing Fagor Electrodomésticos + +responsable empujando a 'to do their homework.'" + +Fagor Electrodomésticos + +'a hacer sus deberes.'" + +These challenges culminated in a profound disconnect between workers and +what was nominally their own enterprise. The authors note: + +"Uno de los hechos que "One of the facts that + +especialmente llamaba la especially drew attention + +atención en el contexto de in the context of the + +las manifestaciones...era demonstrations...was the + +la gran distancia que great distance that members + +reflejaban los socios showed toward what, at + +respecto a lo que, en cuanto least in terms of ownership, + +a la propiedad por lo menos, was their own business + +era su propio proyecto de project." + +empresa." + +This pattern, where workers react to decisions rather than participating +in their formation, continues to manifest in contemporary tech +organizations. Like Fagor's workers, OpenAI employees lacked the +integrated context needed for genuine strategic participation when +OpenAI's board briefly removed Sam Altman as CEO in 2023. As suggested +above in section 5, workers' immediate solidarity with the Altman seems +to have prevented deeper consideration of governance issues. Both cases +demonstrate how formal deliberative structures, when separated from +day-to-day operational integration, can lead to strategic blunders. + +Our proposed ensemble programming and rotation practices aim to address +these failure modes directly by preventing the separation of technical +and social governance, and maintaining radically-integrated +decision-making to prevent class formation. However, these practices +would probably need be complemented by robust mechanisms for solidarity +during crisis. The Fagor experience shows that formal democratic +structures alone are insufficient. + +The goal is not just to prevent class formation but to create conditions +where genuine strategic thinking emerges from collective practice rather +than being imposed from above. As Stacey and Mowles remind us, +organizational patterns emerge from countless local interactions. The +Fagor case shows how these patterns can gradually shift toward +separation and hierarchy even within formally democratic structures. Our +challenge is to create patterns that consistently regenerate integration +and collective capability instead. + +[arabic, start=10] +. {blank} ++ +____ +Problematizing the Lone Genius Myth +____ + +Software development demands collaborative effort, yet the tech industry +clings to organizational structures that privilege individual authority +over collective wisdom. In 2024, the U.S. tech sector remains enthralled +by the "genius founder in a garage" narrative, despite evidence that +this mythology undermines both innovation and productivity. + +Consider a software development team: Their work is not just coding. +Instead, they engage in what Lee identifies as an integrated production +process characterized by: + +* {blank} ++ +____ +Real-time synthesis of diverse knowledge domains (technical, financial, +user experience, business logic) +____ +* {blank} ++ +____ +Inseparability of individual contributions from the collective output +____ +* {blank} ++ +____ +Self-reinforcing generation of social relationships and knowledge +capital +____ + +Lee's analysis of production's social dimension challenges both the myth +of the solitary programmer and the false technical/non-technical +dichotomy. Even a seemingly straightforward feature implementation +requires simultaneous consideration of business requirements, +infrastructure constraints, security architecture, user experience +design, and financial parameters. Each decision point involves multiple +domains of expertise working in concert, making artificial +organizational divisions particularly destructive in software +development. + +Leslie et al. show how fields that prize “innate” talent systematically +exclude women and minorities.footnote:[Leslie et al., "Expectations of +brilliance underlie gender distributions across academic disciplines," +Science, 2015] Gould demonstrates that such beliefs about natural +ability serve to disguise and reinforce existing social +hierarchies.footnote:[Gould, The Mismeasure of Man, 1996] When the +software industry worships individual genius, it therefore does more +than perpetuate a false narrative — it actively undermines innovation, +inclusion, and democratic values. + +[arabic, start=11] +. {blank} ++ +____ +The Two-Track Trap +____ + +The persistent separation between "specialist" and "traditional +consulting" tracks at major firms (as of 2023) exposes a fundamentally +Taylorist view of technical work - treating it as labor to be exploited +rather than a core capability to be cultivated. This mindset is evident +at "Big Four" consulting firms, where "specialists" face higher billable +hours yet lower compensation than their "traditional" colleagues. Until +COVID-19, population-scale changes in consumption, and unprecedented +federal macroeconomic intervention disrupted this pattern, the message +was clear: technical expertise was a resource to extract, not develop. + +Combined with "up or out" advancement policies, this two-track model +produces a toxic dynamic: technical staff face overwork without paths to +influence, while managers lose technical competence. This squanders +human potential and undermines organizational performance. + +Today's U.S. political economy fundamentally weakens democratic +participation by elevating individual tech oligarchs and venture +capitalists above collaborative decision-making processes. The +Jobs-Wozniak garage origin story has transcended myth to become a +destructive organizational template that distorts power relationships +throughout the industry. While individual contributions matter, our +current legal frameworks and institutional norms uncritically prioritize +them, creating a systematic bias against the collective nature of +technological innovation and production. We should think of +__all__footnote:[There is a small percentage of individuals, less than +2% I would hazard, who are straight-up assholes (see generally Robert I. +Sutton, The No Asshole Rule, Balance, 2010). More formally, we might say +that some people score highly on all three of the “socially aversive” +personality traits - psychopathy, Machiavellianism, and narcissism (see +e.g. Daniel N. Jones and Delroy L. Paulhus, Introducing the Short Dark +Triad (SD3): A Brief Measure of Dark Personality Traits, 2014). Spotting +someone like this can be tricky, and misidentifying them (false positive +or false negative) is unfair and costly. My point, without going too far +down this rabbit hole, is that although we should always work to bring +out the best in others, it would be naive to fight every single battle. +I think that people with a pattern of toxic behavior are an important +reason why new businesses fail. The best approach that I know of is to +build a robust culture of skillful communication, and practice +thoughtful, interdisciplinary research and development.] working people +— _not_ just the founders — as rockstars. Not everyone has fully +articulated their rock-stardom, but everyone has it in them (caveated by +footnote 62). Leadership co-creates the stage.footnote:[One way to +counteract structural biases towards commons enclosure by capital would +be to prevent potential 'rug pulls' in open-source projects. A software +cooperative could (a) adopt the Mozilla Public License (MPL) or Affero +General Public License (AGPL) for its open-source software; and (b) +assign the copyright to an outside open-source advocacy organization. +This approach could provide legal protection for the cooperative's +open-source commitments. This is not to suggest that all software should +be open-source all of the time. The point is that if you are going to +build a healthy community, then you should be intentional, deliberate, +and clear about what you truly value.] + +[arabic, start=12] +. {blank} ++ +____ +Important Side Note on Professionalism, Propriety, and Profanity +____ + +If you read footnote 62, you encountered the word _asshole_. We used +this word because we believe it is the best tool for the job. Later, in +section 16, we use the word _bullshit_, referencing David Graeber’s +brilliant formulation “bullshit jobs.” Our philosophy on profane words +in the workplace is that (1) a little goes a long way; and (2) when used +carefully, they can prevent or curtail profane *deeds*. Moreover, there +is a *big* difference between discussing _assholery_ as a personality +trait we observe in a subset of people generally, on the one hand, and +on the other, associating this word even indirectly with *particular* +people with whom *we personally* have some form of relationship. We make +the same caution for _bullshit_; it is one thing to talk about the +sociological phenomenon of _bullshit jobs_; it is quite another to +associate aloud this word with particular positions or roles already +existing in our workplace! + +[arabic, start=13] +. {blank} ++ +____ +Learning from the Great Engines +____ + +The Great Engine companies, before falling prey to what Hopper & Hopper +call "the Cult of the (so-called) Expert",footnote:[Hopper & Hopper, The +Puritan Gift, 2007] demonstrated how organizations can balance clear +authority with broad participation and initiative. Our rotation system +aims to recreate this balance in an explicitly democratic framework. + +Current organizational divisions create harmful silos that prevent +natural integration across functions: technical insights don't shape +strategy, client needs fail to guide technical direction, operations +remain disconnected from architecture, and financial considerations +poorly inform development. This fragmentation contradicts the Great +Engine companies' successful model of organically interconnected +work.footnote:[Hopper & Hopper, The Puritan Gift, 2007] + +Organizations artificially separate capabilities that naturally +reinforce each other: technical mastery from coordination skills, client +engagement from systems expertise, and operational knowledge from +strategic planning. This fragmentation produces what Gregor Hohpe calls +an "hourglass shape" of organizational understanding.footnote:[Gregor +Hohpe, The Software Architect Elevator, 2020] Yet his suggestion to add +an "architect" role would at worst be another artificial silo, and at +best be a restoration of the middle manager to their former glory - that +is, the glory at the pre-1970 “Great Engine” companies documented by +Hopper & Hopper, before MBA programs ruined what it means to be a middle +manager. Either way, a class hierarchy is left intact. + +[arabic, start=14] +. {blank} ++ +____ +The Rhythm of Work +____ + +Treating technical work as an isolated specialty separate from core +business functions creates artificial barriers that undermine both +technical and organizational excellence. However, not all functions +benefit equally from rotation. While ensemble programming may thrive on +frequent rotation, client-facing roles demand stability. Client +relationships depend on trust, shared context, and dependability - areas +where rotation would be more limited. + +Recognizing that distinct types of work have distinct natural +requirements differs fundamentally from imposing artificial divisions. +While some work thrives on frequent rotation and fresh perspectives, +other work needs deep relationship continuity. The challenge lies in +understanding these natural shapes while preventing them from enabling +class stratification. For example, the next section explains why the +rhythm of client relationship management is fundamentally different from +the rhythm of a mob programming session. And below, in section 16, we +categorize various functions into “suitable for rotation” versus +“suitable for voting” - however, this exercise is firstly meant as a +demonstration; different practitioners would probably arrive at slightly +different breakdowns (perhaps an opportunity to employ an aggregative +mechanism). + +[arabic, start=15] +. {blank} ++ +____ +Crafting Client Connections +____ + +While many technical functions would benefit from rotation, client +relationships need continuity. Trust and shared understanding develop +over time, making frequent transitions counterproductive. Yet this +necessary stability creates risks: in traditional organizations, client +relationships often become exclusive channels where key contacts +accumulate concentrations of knowledge and power. When these individuals +depart or change roles, valuable institutional memory vanishes, harming +both client service and organizational effectiveness. + +The "Single External Contact Approach" would organize client +relationships such that: + +* {blank} ++ +____ +One member-worker serves as “single contact” for at most one client +contact +____ +* {blank} ++ +____ +A dedicated-yet-rotating support team of worker-members backs each +single contact-external counterpart pair +____ +* {blank} ++ +____ +Team members rotate secondary roles to share knowledge +____ + +In addition to decentralization, the purpose of this system is not to +enforce mathematically precise one-to-one relationships - which would be +neither practical nor desirable - but rather to protect worker wellbeing +by preventing client communications from becoming overwhelming. The +'single contact' designation is primarily about establishing clear +channels and boundaries. Technical tools like email filtering would +support this - for example, routing emails from non-designated client +contacts to separate queues rather than directly to a member's inbox. +While members may naturally interact with multiple external contacts in +various ways, having designated primary relationships may help maintain +sustainable patterns of client engagement while preventing it from +becoming all-consuming. + +This system could afford both stability and adaptability in client +relationships. Small, consistent teams would support each client while +role rotation enabled knowledge transfer. For example: Alice serves as +single contact for Contact Y at Client X, supported by Bob and Charlie. +The team maintains relationship continuity through: + +* {blank} ++ +____ +Rotating support roles +____ +* {blank} ++ +____ +Documented client information and meeting minutes +____ +* {blank} ++ +____ +Skill transfer (e.g., Alex shadowing Bob before transition) +____ + +With Alice as single contact for Contact Y at Client X, she builds +consistent trust while Bob and Charlie provide active support. The +support team structure enables smooth transitions - for instance, Bob +may shift to single contact for Contact W at New Client Q, with new +worker-member Alex taking his previous role. Clear, simple protocols +guide all transitions, whether planned or circumstantial. + +Documentation, knowledge-sharing sessions, collaborative support work +(pairing and mobbing), and informal networks would hopefully ensure +information flows through the organization such that everyone feels like +they know what they need to know (and that those feelings are not +misleading). This organizational structure could balance relationship +stability with distributed knowledge and power. The idea is that +everyone is connected to the clients, but because the connection is +constrained to a single contact per person, everyone also has plenty of +bandwidth for other types of work. Democratic principles would guide +operations while celebrating normal human connections. + +[arabic, start=16] +. {blank} ++ +____ +Democracy in Action +____ + +The cooperative could manage its diverse work patterns through several +mechanisms, which might include: + +* {blank} ++ +____ +Every member does ensemble programming +____ +* {blank} ++ +____ +All contribute to strategic discussions +____ +* {blank} ++ +____ +Each maintains _just one_ relationship with an external contact who is a +single natural person (if there are not enough client contacts, then a +perhaps a prospect, or perhaps a colleague at another firm) +____ + +* {blank} ++ +____ +Collective decisions on major changes +____ + +The cooperative should distinguish between two aspects of democracy: +decision-making and reality-testing. Democratic decision-making involves +collectively choosing courses of action - for instance, voting to +allocate hours for developing a new documentation system. But democratic +reality-testing is about maintaining the collective ability to honestly +evaluate whether that system is serving any real purpose or has become +mere ritual. Concretely, democratic decision-making could look like: + +* {blank} ++ +____ +Voting on resource allocation for new initiatives +____ +* {blank} ++ +____ +Setting parameters for rotation schedules +____ +* {blank} ++ +____ +Establishing or updating the compensation structure +____ + +Democratic reality-testing could look like: + +* {blank} ++ +____ +Mob programming sessions where impractical processes are immediately +exposed +____ +* {blank} ++ +____ +Regular opportunities for members to question whether established +systems still serve their purpose +____ +* {blank} ++ +____ +MVP demonstrations where proposed solutions must prove their value +through working implementations +____ +* {blank} ++ +____ +Protected spaces for discussing gaps between stated and actual value of +work - while mindful of human cognitive bias to presume criticism and +skepticism is more authoritative than constructive and positive +proposals — and the underappreciated value of negative results +____ + +The mob programming pattern may be powerful for reality-testing because +it is harder to maintain self-deception when working together in +real-time. When six people are implementing a process at the same +keyboard at the same time, its actual value (or lack thereof) would +become quickly apparent. + +The two-track trap introduced earlier, in section 11, tends to generate +what Graeber calls "bullshit jobs" - roles that exist primarily to +manage other managers.footnote:[Graeber, Bullshit Jobs: A Theory, 2018] +This happens through a predictable pattern: + +[arabic] +. {blank} ++ +____ +Management becomes separated from technical work +____ +. {blank} ++ +____ +This separation creates communication problems +____ +. {blank} ++ +____ +New roles are created to address these problems +____ +. {blank} ++ +____ +These new roles create further separation and communication issues +____ +. {blank} ++ +____ +The cycle continues, creating layers of bureaucracy +____ + +As Graeber notes, many people in such roles privately question whether +their jobs need to exist at all.footnote:[Graeber, 2018] This isn't +because coordination itself is unnecessary, but because the separation +of coordination from work creates the need for additional coordination +of coordination. + +The Springfield Armory demonstrates that organizational effectiveness +requires balancing structured coordination with inclusive +participation.footnote:[HH at 50] While strategic decisions warrant +democratic processes, routine operations often function better through +streamlined methods like rotation. Success depends on aligning decision +mechanisms with decision types. In other words, rather than +micromanaging daily operations, democratic oversight would focus on +establishing and updating protocols. This approach mirrors both +Springfield's operational efficiency and the emergent leadership model +seen in ensemble programming, where authority flows from active +participation rather than formal appointment. + +Rotation challenges the false dichotomy between technical and managerial +work. Instead of isolating technical expertise as a resource to exploit, +rotation develops both technical and leadership capabilities across the +organization, creating more effective operations by recognizing these +skills as complementary rather than separate domains. + +*Rotation examples (short-term decisions):* on-call duties, +documentation curation tasks, regular maintenance work, coordinating +Single External Contact Approach + +Rotating as a way of preventing bureaucratic accumulation: + +* {blank} ++ +____ +No permanent coordination roles to defend +____ +* {blank} ++ +____ +Direct experience prevents unnecessary processes +____ +* {blank} ++ +____ +Fresh perspectives through regular changes +____ +* {blank} ++ +____ +Natural simplification of procedures +____ +* {blank} ++ +____ +Immediate feedback on process effectiveness +____ +* {blank} ++ +____ +Integration of technical and managerial capabilities +____ + +*Voting examples (long-term decisions):* significant process changes, +resource allocation principles, long-term strategic plans + +Voting as a way of preventing bureaucratic accumulation: + +* {blank} ++ +____ +Deeply and broadly understood legislative process +____ +* {blank} ++ +____ +Auditable (within reason) decision-making processes +____ +* {blank} ++ +____ +Tunable rotation patterns +____ +* {blank} ++ +____ +Power to modify coordination protocols +____ + +The two-track antipattern is not new. Taylor's attempt to separate +planning from execution led to similar proliferation of coordinators +coordinating coordinators. As we saw in the Great Engine companies, the +solution is not to eliminate coordination but to integrate it with the +work being coordinated.footnote:[Hopper & Hopper, The Puritan Gift, +2007] + +The Japanese _kacho_ system offered one approach to this integration, +creating section heads who maintained both technical competence and +coordination responsibilities.footnote:[Ibid., discussion of Japanese +management practices at 115] However, the cooperative rotation system +democratizes this integration across overlapping sets of members, +encouraging leadership capabilities to develop naturally alongside +technical skills throughout the organization. This management philosophy +strengthens both personal and organizational capabilities. Individual +workers develop hands-on expertise alongside strategic thinking skills. +While maintaining their technical proficiency, they contribute to +operational and strategic decisions. + +Flattened hierarchies and dispersed expertise could yield agile +responses to market changes while reducing administrative overhead. This +approach aims to preserve technical excellence by harmonizing individual +contributions with collective judgment. The outcome could be an +efficient organization that maintains essential coordination without +succumbing to bureaucratic excess. Beyond its democratic merit, this +model might deliver superior results. + +[arabic, start=17] +. {blank} ++ +____ +Expertise Without Empire +____ + +Developing deep expertise is crucial for any organization. However, +certain types of expertise, finance and auditing among them, can become +chokepoints for democratic control.footnote:[Michael Power, The Audit +Society; Townley, Reframing Human Resource Management; Jackall, Moral +Mazes: The World of Corporate Managers; Rose & Miller, Governing the +Present: Administering Economic, Social and Personal Life] The challenge +is to develop expertise while preventing it from becoming a basis for +class-like divisions or inappropriate authority. + +Financial expertise can become a power base through several mechanisms: +control over resource allocation, monopolistic interpretation of +financial metrics, and the mystification of operations behind +mathematical complexity. A cooperative might addresses these risks by +pioneering "finance mobs," where non-financial workers participate +directly in financial operations. However, some finance operations lack +collaborative tools that would be needed for regulatory compliance (the +need for a designated accountable person). The cooperative could begin +experimenting with collaborative financial work in limited, low-risk +contexts. Like the early mob programming experiments at Hunter +Industries, it would start small. + +As we discussed above in section 15, client relationship management +requires special consideration. Unlike purely technical functions, +client relationships involve deep trust, shared context, and emotional +investment that make frequent rotation counterproductive. As we +understand from clinicians in the field of healthcare, particularly +mental healthcare, having to repeatedly rebuild trust relationships +creates unnecessary strain for both parties. + +A cooperative could address these challenges through a system of +dispersed responsibility. At its core is the Single External Contact +Approach, where each member serves as the single contact for at most one +contact at _at most_ one client. This arrangement maintains relationship +continuity as the default. + +Worker-members could request relationship reassignments, subject to some +review mechanism. Support roles would enable new members to gain client +relationship experience before taking on single contact +responsibilities. + +Financial operations have regulatory requirements for clear +accountabilityfootnote:[Allen Holub has a thought-provoking blog post +that problematizes the emphasis placed on accountability in workplace +and corporate culture (#NoAccountability, 11 July 2022, +). +It stands in some tension with Hopper & Hopper’s approving quotation of +Florence Nightingale: “someone has to be in charge”. What they and she +mean are that someone needs to be dependable and able to explain the +situation. What they perhaps underappreciate are the power dynamics that +Holub criticizes.]; effective collaboration would require supporting +tools that don't yet exist. Rather than trying to specify these tools up +front, a cooperative could follow the pattern that worked for mob +programming: let practitioners experiment with existing tools, observe +what works, and gradually develop purpose-built tools that support +emerging good practices. Perhaps look to models like surgical teams and +aircraft cockpit crews, which successfully combine clear individual +accountability with intensive real-time collaboration. Instead of trying +to mob everything immediately, the cooperative could identify specific +financial activities that could benefit most from real-time +collaboration, such as: + +* {blank} ++ +____ +Complex financial modeling where multiple perspectives could catch +errors +____ +* {blank} ++ +____ +Budget planning sessions where diverse input is valuable +____ +* {blank} ++ +____ +Risk assessment activities where different viewpoints are crucial +____ + +Successful financial collaboration requires more than just structural +changes. The cooperative could develop a culture where questions are +welcomed, mistakes are treated as learning opportunities, knowledge +sharing is appreciated, and clear accountability coexists with +collective responsibility. + +Progress toward more collaborative financial practices could be +evaluated based on outcomes such as error reduction, regulatory +compliance, and audit performance. This approach is intended to account +for the evolutionary nature of successful organizational innovations, +the need for tools and practices to co-evolve, the reality of regulatory +requirements, the importance of starting small and learning from +experience, and the critical role of cultural development. + +Following Lee's analysis of production as inherently +interconnected,footnote:[Lee., p. 41] rotation could develop expertise +throughout the organization while democratic processes could ensure it +serves collective needs. This could create "distributed expertise" - +where deep knowledge enriches the collective without creating +overpowering chokepoints. + +This integrated understanding might manifest as: + +* {blank} ++ +____ +Financial workers rotating through software development +____ +* {blank} ++ +____ +Developers participating in financial operations as tooling capabilities +mature +____ +* {blank} ++ +____ +Everyone communicating with a client sooner or later +____ +* {blank} ++ +____ +Deep knowledge sharing +____ +* {blank} ++ +____ +Major decisions combining expertise with democratic process +____ +* {blank} ++ +____ +Democratic oversight ensuring expertise serves collective needs +____ + +The mechanics of rotation should be structured to prevent both +bureaucratic accumulation and institutional amnesia. When individuals +monopolize technical direction or weaponize code standards as barriers +to entry, they create de facto authority. This problem compounds when +system complexity or historical codebase knowledge becomes a source of +unchecked influence. + +Once a system or process has been approved for scaling beyond its MVP, +rotation could become mandatory but gradual (e.g. “no less than 10% and +no more than 40% of the team may rotate out in any given quarter”), +ensuring continuity of knowledge while preventing entrenchment. Original +creators would all eventually rotate to other work, but not +simultaneously - and they could still come back later. New members must +overlap with existing team members for effective knowledge transfer. + +This pattern may help ensure that: + +* {blank} ++ +____ +No one builds permanent fiefdoms or power trips around particular +systems +____ +* {blank} ++ +____ +Knowledge is constantly distributed throughout the cooperative +____ +* {blank} ++ +____ +Fresh perspectives regularly question existing processes +____ +* {blank} ++ +____ +Systems remain comprehensible to new people or risk elimination +____ + +In traditional organizations, Infrastructure & Operations expertise +often consolidates into informal power centers. This manifests through +privileged control of deployments, exclusive production access, and +crisis response authority. Most concerning is when feelings of +employment precarity motivate accumulating technical debt for added job +security—where critical systems are understood by only select +individuals. Cooperatives could prevent such power accumulation through +structured responsibility-sharing: rotating on-call duties and +infrastructure roles. + +The prevention of power concentration may require multiple reinforcing +mechanisms. In addition to the cooperative deliberately maintaining zero +permanent roles, every worker-member could receive an equal budget for +research, development, learning, and teaching - preventing financial +resources from becoming a source of power imbalance. + +[arabic, start=18] +. {blank} ++ +____ +Building the Collaborative Space +____ + +Drawing on Arendt's concept of "spaces of appearance" - where +individuals reveal themselves through speech and action - we seek to +enable self-expression while meeting operational needs, by recognizing +that different work modes benefit from different environments. + +The cooperative could greatly benefit from a continuously refined +physical and digital workspace. The layout could integrate focused quiet +zones with collaborative open areas, supporting diverse work modes, from +real-time ensemble programming to independent research. Both physical +and virtual spaces could be configured to enable formal and informal +knowledge exchange. Digital systems could maintain clear, accessible +engineering documentation, complemented by scheduling tools for rotation +management. + +Financial Collaboration Spaces. The cooperative's physical and digital +infrastructure could also support the gradual development of +collaborative financial practices. This means: + +* {blank} ++ +____ +Dedicated areas equipped for financial ensemble work with appropriate +privacy and security +____ +* {blank} ++ +____ +Digital tools that maintain clear audit trails while enabling real-time +collaboration +____ +* {blank} ++ +____ +Infrastructure for maintaining parallel traditional and experimental +accounting processes during transition periods +____ + +Client relationship spaces could serve a different but equally vital +function. These areas would support the development of deep +understanding between each single contact and their external +counterpart, while providing opportunities for support team members to +contribute fresh perspectives without disrupting established +relationships. + +Coordination spaces might connect these different work modes. Meeting +facilitation roles could rotate regularly, while the composition of +meeting attendees could evolve gradually to maintain both continuity and +fresh input. + +We should note that perennial changes in team/committee/meeting +composition does not _have_ to mean a constant sense of instability +(although that does seem like a very important risk to beware of). +People could rotate amongst a limited pool of other people. Thus someone +rolling off a team would not be saying “Sayonara” but rather “See you +soon!” + +Modulating these different patterns of work while maintaining a positive +culture implies several mechanisms. For example, if an ensemble isn't +working - maybe people are talking over each other, or someone's +consistently dominating discussion - the members involved could discuss +it in their end-of-day retrospective. These short sessions might focus +on what went well that day and how to “turn up the good” as Woody Zuill +says. Issues that affect multiple teams might need broader discussion, +perhaps via asynchronous chat. + +A software cooperative faces exciting territory in expanding ensemble +practices beyond programming. Many tasks have never been attempted as +ensemble work. When encountering a new type of work, members could try +it first as an ensemble, document the experience, and then adjust based +on what was learned. It's perfectly sensible to use traditional methods +after genuine experimentation (try it the weird way first). + +[arabic, start=19] +. {blank} ++ +____ +Beyond Our Walls +____ + +While the ensemble can embody democratic values in daily small-team +(shop-level) operations, these principles could also be reflected in the +cooperative's overall (enterprise-level) governance mechanisms. Firstly, +there are intriguing possibilities for quite large ensembles (e.g. 30+ +persons). Secondly, in the less experimental realm, overall governance +mechanisms can draw from cooperative practices, such as electoral +committees to oversee free and fair elections, board skills audits to +ensure competent leadership, and governance codes. As the International +Cooperative Alliance emphasizesfootnote:[International Cooperative +Alliance, Guidance Notes to the Co-operative Principles, p 19. 2015. +https://perma.cc/Y2RE-3MUA], “Democratic member control is protected and +enhanced by effective co-operative legislation.” Software cooperatives +should establish bylaws that detail voting procedures, term limits for +elected positions, and mechanisms for member proposals and +decision-making. + +The cooperative's commitment to democratic values could extend beyond +its internal practices, shaping its interactions with the broader tech +ecosystem and informing its approach to competition and innovation. +While leveraging adversarial interoperability to compete in the tech +landscape, the cooperative should respect user privacy. It should +observe fair competition practices, advocacy for open standards, and a +commitment to transparency. The cooperative should ensure its +interoperability practices genuinely promote competition and user choice +rather than inadvertently consolidating power.footnote:[See Cory +Doctorow, The Internet Con: How to Seize the Means of Computation, 2023, +at 55.] By maintaining a long-term vision of a more open and fair tech +ecosystem, the cooperative could demonstrate that it is possible to +compete effectively without resorting to the monopolistic practices it +aims to challenge. This stance could differentiate the cooperative in +the long run. + +[arabic, start=20] +. {blank} ++ +____ +Engaging with Policy and Financial Institutions +____ + +While cooperatives aim to create alternative economic structures, they +can also engage strategically with government policy. Cooperatives could +advocate for supportive policies, such as preferential tax treatment, +access to public contracts, or legal recognition of cooperative +governance structures. Cooperatives could push for antitrust policy that +recognizes the value of smaller, democratically-owned enterprises in +maintaining competitive markets.footnote:[Governments also sometimes +attempt to co-opt or control cooperative movements. For example, in the +United States during the McCarthy era, some rural electric cooperatives +were pressured to prove their 'American' credentials and distance +themselves from leftist ideologies (Schneider, 2018).] + +Cooperatives navigate a financial landscape shaped by _as-is_ fiscal and +monetary policy. Some recently-unearthed history of the Federal +Reservefootnote:[Nathan Tankus, Revealed: The Federal Reserve's Secret +1973 Plan to Bailout the Saving & Loan Industry That Very Nearly +Happened. Notes on the Crises Blog, 24 Sept 2024. +] +inspires us to suggest inclusive emergency lending. The Federal +Reserve's 1973 plan to provide emergency liquidity support to the entire +Savings & Loan industry via the Federal Home Loan Banks^78^ demonstrates +the potential for central banks to support specific economic sectors. +Cooperatives could advocate for the inclusion of worker-owned +enterprises in such emergency lending programs, ensuring they have +access to crucial liquidity during economic crises. + +Beyond engaging with central bank policy, cooperatives could proactively +establish relationships with cooperative-friendly financial institutions +from inception. Creating mutual aid agreements with other cooperatives +for emergency lending and shared resources could provide an alternative +to traditional financial power structures. These relationships should be +built before they're needed - the time to establish credit lines is +before facing potential predatory pricing from competitors. + +Cooperatives could also work to create cooperative-centered financial +institutions (also suggested earlier, in Section 5, and in footnote 29). +Many essential social services (like kindergartens, elder care, and +Linux) cannot generate sufficient revenue for conventional loan +repayment, even with cross-subsidization from more profitable +cooperative ventures. This is not a flaw in these goods and services - +it reflects their fundamental nature as public goods that shouldn't be +subject to market logic. + +Rather than treating this as a problem to be solved through creative +financial engineering or alternative currencies, cooperative banks could +embrace their potential role as interfaces between public funding and +social provisioning. A cooperative bank could: + +[arabic] +. {blank} ++ +____ +Act as a conduit for public funding, using its chartered status and +regulatory compliance infrastructure to efficiently channel public +resources toward social needs +____ +. {blank} ++ +____ +Provide transparent accounting and democratic oversight of how public +resources and funds are used, ensuring accountability to both government +agencies and local communities +____ +. {blank} ++ +____ +Document the real economic value created by social services, without +requiring them to meet impossible profitability targets +____ +. {blank} ++ +____ +Structure the financial flows to maximize social benefit rather than +financial return +____ +. {blank} ++ +____ +Complement rather than replace public funding, while improving its +democratic character +____ + +This approach recognizes that the real constraints on social services +are not financial but material - the availability of skilled workers, +suitable facilities, and necessary supplies. When these real resources +exist, the role of a cooperative bank is not to make social services +"profitable" but to facilitate their provision through a combination of +public funding and democratic governance. + +Rather than trying to replicate traditional banking's focus on +self-amortizing loans and profit generation, cooperative banks could +pioneer new forms of hybrid public-cooperative finance. By interfacing +between public funding sources and cooperative service providers, they +can help build a more democratic economy that truly serves social +needs.footnote:[Just as William Edwards Deming in Japan showed how +letting workers stop the production line to address defects led to +better manufacturing processes (Steve Keen & Phil Dobbie, Co-ops change +the game, Debunking Economics Podcast, Oct 19, 2024), cooperative banks +could empower their workers to identify and address systemic issues in +banking practices. As Keen notes, when workers in Japanese factories +could stop the line, "The worker explains what's failing... and then the +idea gets implemented, the worker gets a bonus out of it, and even +people working in a production line found their jobs interesting." This +principle of worker empowerment and process improvement could be adapted +to banking operations.] + +Software cooperatives might leverage international recognition and +support when advocating nationally. The United Nations and the +International Labour Organization (ILO) recognize cooperatives. ILO +Recommendation 193 on the Promotion of Cooperatives provides a framework +for governments to develop supportive policies for +cooperativesfootnote:[ICA, Guidance Notes to the Co-operative +Principles, +, +p 49, 2015.]. + +Cooperatives should also engage proactively with antitrust policy to +ensure a level playing field and recognition of their unique structure. +They should advocate for antitrust frameworks that distinguish between +coordination among workers or small producers and anticompetitive +behavior by large corporations. This could involve pushing for safe +harbor provisions that allow cooperatives to engage in certain forms of +coordination without triggering antitrust scrutiny, provided they meet +specific criteria for democratic ownership and control. (We will revisit +this idea below in section 21.) Cooperatives could also advocate for a +more nuanced approach to vertical integrationfootnote:[The cooperative +could approach vertical integration differently from traditional tech +giants, emphasizing openness, transparency, and democratic control. This +could involve creating federations of specialized cooperatives across +the tech stack, using open standards and protocols for all integrations, +and ensuring major integration decisions involve the entire membership. +The cooperative could maintain a modular architecture to prevent +lock-in. This approach could transform vertical integration from a tool +of monopolistic control into a means of building a resilient, efficient, +accountable, and mutually supportive technological ecosystem.] in +democratically-owned entities, arguing that traditional concerns about +market power may not apply in the same way to cooperative structures. +Furthermore, they could propose new metrics for assessing market +competition that go beyond consumer prices to consider factors like +worker welfare, community impact, and long-term innovation. Cooperatives +could help shape an antitrust regime that fosters a more diverse and +democratic economy. + +[arabic, start=21] +. {blank} ++ +____ +Market Governance, Legal Framework, and Enterprise Survival +____ + +A viable software cooperative needs three foundational elements. First, +it needs market governance mechanisms that enable stable operations +without monopolistic practices. Second, it needs technical +implementations that support democratic control and federation. Third, +it needs legal frameworks that protect cooperative structures while +ensuring compliance. How could these elements work together to create a +resilient democratic organization? + +First, consider price stability. Lee (2017) identifies price competition +as the "most important form of potential instability in a +market."footnote:[Lee at 154] When prices fall below costs, enterprises +fail. Yet price coordination can violate antitrust law. The cooperative +must therefore create legitimate, transparent mechanisms for stable +price formation. This means documenting internal costing methodology, +implementing democratic processes for determining profit margins, and +establishing clear price adjustment procedures. + +The cooperative must also maintain itself as a "going concern" through +continuous cycles of production. This requires three key financial +practices: working capital management, cost structure analysis, and +growth planning. The cooperative needs sufficient reserves, +relationships with cooperative financial institutions, and buffer funds +for market fluctuations. Regular review of enterprise average total +costs at budgeted capacity (EATC~B~) informs both operational decisions +and long-term technology investments. + +External market pressures incentivize market management through two core +strategies: institutional relationships and technical federation. To +understand these strategies, we must first understand market governance. +As Tankus & Herrine (2022) explain, "markets must develop and +maintain—they must reproduce—institutions to manage quotidian threats to +stability." When a software cooperative participates in ForgeFed or +similar federation protocols, it is not just making a technical choice. +It is helping build market governance institutions that support +democratic enterprises. + +The first core strategy, institutional relationships, involves +participating in what Lee terms "market governance organizations" - +particularly software industry trade associations and technical +standards bodies. The cooperative could engage with these organizations +to maintain space for democratic approaches. For example, when HashiCorp +changed Terraform's license, they demonstrated how market or investor +pressures can force changes that harm the software commons. To resist +such pressures, a cooperative can work with open source advocacy +organizations in three ways: (a) assigning copyright to them as a +mechanism of self-restraint; (b) leveraging their legal teams to defend, +e.g., AGPL implementations; and (c) participating in standard-setting to +ensure democratic values are represented. + +The second core strategy involves technical federation through open +protocols and shared infrastructure. This requires directing profits +toward developing independent tools and infrastructure. ForgeFed +exemplifies this approach. As an ActivityPub extension for software +forges, it enables federation between different code collaboration +platforms. Users can interact across different hosting sites without +creating multiple accounts. This transcends the traditional dichotomy +between centralization on profit-oriented platforms and isolated +independent hosting. + +These cooperative structures must operate within specific legal +frameworks that both constrain and enable democratic governance. The +Capper-Volstead Act of 1922 provides an instructive historical +precedent: just as farmers needed collective power to avoid being +crushed between powerful railroads and processors, today's software +workers need collective power to avoid being squeezed between various +platform monopolies. + +These mechanisms must operate within the "firm exemption" identified by +legal scholar Sanjukta Paul - coordinating economic activity within the +cooperative structure while avoiding illegal price fixing across firm +boundaries. The pricing reflects direct labor costs, infrastructure, +professional development, buffer fund contributions, and research +allocations. + +Unlike traditional tech firms chasing exponential growth and +monopolistic positions, the cooperative could structure its finances for +sustainable steady-state operation with moderate surpluses. This reduces +capital requirements while building long-term resilience. + +The strategy balances immediate survival needs with long-term +transformation goals. This requires clear documentation of internal +price formation, transparent governance processes, and regular (or +perhaps real-time, via the ensemble pattern) legal review of practices. +We aim to demonstrate that enterprises can compete effectively while +building toward a more democratic economy. + +[arabic, start=22] +. {blank} ++ +____ +Challenges +____ + +While mob programming and rotating leadership roles can help maintain +democratic values in a software cooperative, dilution or co-optation of +cooperative principles will probably be a persistent +threat.footnote:[Schneider (2018) discusses examples of cooperatives +facing such challenges, from rural electric cooperatives becoming +increasingly detached from their member-owners to credit unions +operating more like traditional banks.] Moreover, the software +cooperative faces fundamental market challenges when competing with +established tech giants, particularly regarding sequential production +and capital requirements. Traditional firms can sustain losses during +market downturns using reserves accumulated through earlier monopolistic +practices. A cooperative must build comparable resilience through +inter-cooperative networks and buffer funds. + +Lee's (2017) production analysis techniques offer ways to refine our +processes while maintaining democratic principles. However, Goodhart's +law warns that "When a measure becomes a target, it ceases to be a good +measure." Over-reliance on specific metrics like pricing formulas or +productivity measures could undermine cooperative values. To mitigate +these risks, cooperatives could develop flexible evaluation systems that +consider multiple factors and are less susceptible to manipulation - +looking beyond traditional financial metrics. The ICA emphasizes that +cooperatives work for the “sustainable development of their +communities.”footnote:[ICA, Statement on the Co-operative Identity, +, +p ii, 2015.] + +Developing effective collaborative financial practices presents unique +challenges. Moving toward more collaborative financial work requires +understanding both democratic ideals and practical constraints. + +Tool Development Challenges: + +* {blank} ++ +____ +Existing financial software assumes individual rather than collaborative +work +____ +* {blank} ++ +____ +Financial tools must maintain clear audit trails +____ +* {blank} ++ +____ +Regulatory compliance features need to support rather than hinder +teamwork +____ +* {blank} ++ +____ +New tools must evolve based on actual practice rather than theoretical +design +____ + +Regulatory Compliance Challenges: + +* {blank} ++ +____ +Individual accountability requirements must be maintained +____ +* {blank} ++ +____ +Audit trails must clearly show decision ownership +____ +* {blank} ++ +____ +Regulatory bodies may be skeptical of novel approaches +____ +* {blank} ++ +____ +Compliance documentation must adapt to collaborative work +____ +* {blank} ++ +____ +Professional liability considerations must be addressed +____ + +Cultural Development Challenges: + +* {blank} ++ +____ +Traditional financial roles may resist collaborative approaches +____ +* {blank} ++ +____ +Teaching/learning must be balanced with operational needs +____ +* {blank} ++ +____ +Clear accountability must coexist with collective responsibility +____ +* {blank} ++ +____ +Trust must be built gradually through demonstrated success +____ + +These challenges suggest an incremental approach, grounded in Lee's +analysis of how accounting procedures are “relatively enduring +structure[s]”footnote:[Lee at 81] essential to enterprise survival. They +provide “an important way of representing economic facts to +management”footnote:[Id.] and “give social coherence and meaning to +organizational behavior.”footnote:[Id.] As we also discussed earlier in +section X, by experimenting incrementally while maintaining traditional +methods, the cooperative could develop new collaborative practices +without endangering its status as a going concern. + +The experience of surgical teams and aircraft crews shows that intensive +real-time collaboration can coexist with clear individual accountability +in high-stakes environments. However, these models evolved over decades +of practical experience. We expect collaborative financial practices to +require patience and persistence in development. The key is maintaining +democratic principles while acknowledging that effective implementations +must emerge from practical experience rather than theoretical design. + +With these practical challenges in mind, participatory decision-making +in cooperatives could manifest as a system of rotating leadership roles, +fostering skill development and power distribution among members. +Supermajority-based approaches for major decisions could ensure all +voices are heard, while clear processes for proposal development and +implementation could maintain efficiency.footnote:[To protect against +potential manipulation of democratic processes, implementing cooling-off +periods could be beneficial. These would involve waiting periods between +joining the cooperative and gaining full voting rights, as well as +between proposing a change and voting on it. Such measures can prevent +"raid" scenarios where threat actors might coordinate to force through a +particular decision. This approach, inspired by blockchain governance +mechanisms, (e.g. Vitalik Buterin, Proof of Stake: The Making of +Ethereum and the Philosophy of Blockchains. Seven Stories Press, 2022 at +275) balances the cooperative's commitment to democratic participation +with the need to ensure that decision-making power is held by those with +a genuine, long-term stake in the cooperative's success.] + +Tension between cooperative ideals and practical compromises is a +recurring theme in cooperative historyfootnote:[Schneider, 2018], +although the definition of “practicality” is debatable.footnote:[From +the vantage point of this relatively affluent US worker in the year +2024, concerns on the part of Mondragón managers in 1988 about the +impracticality of the 4.5:1 pay ratio maximum seem outlandish. +Educational resources in my admittedly privileged context are so +abundant that professional skill development is limited only by +imagination — and so vacancies should be fillable via internal hiring.] +The key seems to be in making these decisions transparently and +democratically, always with an eye towards preserving the cooperative's +core mission and values. The ICA notes that larger cooperatives often +develop multi-tiered democratic structures.footnote:[ICA, Guidance Notes +to the Co-operative Principles, +, +p 62, 2015.] In addition, digital tools might facilitate democratic +participation at scale. + +Software cooperatives should conduct production analysis by examining +their methods, cost structures, and efficiency - both at the +shop/team/ensemble level and at more-general enterprise levels. This +could include analyzing collective productivity, assessing development +methodologies, and evaluating costs of tools and infrastructure. By +tracking metrics like the EATC~B~, cooperatives can make informed +decisions about pricing, resource allocation, and investments in +research and development. + +Although it would be a mistake to scale immediately, keeping scale in +mind seems prudent. This could involve developing modular architectures, +implementing clear processes for onboarding new worker-owners, and +creating standardized but flexible governance models. + +[arabic, start=23] +. {blank} ++ +____ +Unpredictability +____ + +Despite its democratic structure, the cooperative will probably face +internal conflicts and power imbalances. Complex responsive processes +theoryfootnote:[Stacey & Mowles at 402. Power imbalances might arise +from differences in nationality, wealth, gender, race, expertise, +tenure, or personal charisma (Ibid at 349).] recognizes that power is a +structural characteristic of all relationships and argues that conflict +is an inherent part of organizational life. Within such complex patterns +of interaction, bureaucratic accumulation - as Graeber +arguedfootnote:[Bullshit Jobs at xxi] - often emerges as both a response +to and generator of organizational challenges. The following strategies +could help make the best of such challenges: + +[arabic] +. {blank} ++ +____ +Power audits: Conduct periodic assessments of informal power structures +within the cooperative, identifying emerging centers of disproportionate +influence. +____ +. {blank} ++ +____ +MVP requirement to prevent bureaucratic bloat: new systems would prove +their value through working demonstrations; the same people proposing +must implement; no specialized positions are created for new +initiatives; and resources come from existing work time, making it +difficult to ignore the trade-offs. +____ +. {blank} ++ +____ +Mandatory inter-ensemble rotation to prevent bureaucratic entrenchment: +no system can survive solely through its creators' advocacy; fresh +perspectives regularly challenge assumptions; knowledge distribution +prevents expertise-hoarding; and status would not accumulate around +system "ownership" +____ +. {blank} ++ +____ +Ensemble Programming to enable continuous reality-testing: impractical +processes become immediately apparent; multiple perspectives catch +unnecessary complexity; and knowledge transfers naturally through +collaboration +____ +. {blank} ++ +____ +Rotating facilitation: In addition to rotating between source code +teams, implement a system of rotating facilitation roles in meetings and +decision-making processes to prevent the consolidation of procedural +power. +____ +. {blank} ++ +____ +Anonymous feedback: Implement secure, anonymous channels for members to +voice concerns about power imbalances or conflicts without fear of +repercussion. +____ +. {blank} ++ +____ +Transparency: Maintain access to all decision-making processes and +financial information for all members. +____ +. {blank} ++ +____ +Journal club for interdisciplinary articles of interest, with a +Starbucks™ gift card for whenever somebody finds an article with at +least 1 citation to Foucault _and_ everybody reads that article ahead of +time. +____ + +These mechanisms create what we might call "institutional impermanence" +- nothing can become permanent unless it repeatedly proves its value to +new groups of people over time. When organizational structures must +constantly rejustify their existence to fresh eyes, bureaucratic +accumulation finds few footholds. + +The key is that these aren't just policies - they're structural +safeguards that make bureaucratic accumulation physically difficult. +Just as a well-designed building naturally guides foot traffic in +certain directions, our goal is structures that naturally guide +organizational evolution away from unnecessary complexity. + +Cooperative culture should tend to treat unexpected developments as +opportunities rather than threats.footnote:[Stacey & Mowles at 191: “For +Mintzberg, learning is trial-and-error…”] This could involve: + +[arabic] +. {blank} ++ +____ +Flexible governance structures. +____ +. {blank} ++ +____ +Encouraging experimentation and viewing 'failures' as valuable learning +experiences. +____ +. {blank} ++ +____ +Maintaining loose boundaries between the cooperative and _friendly and +kindred elements_ of its environment, allowing for co-evolution with +broader ecosystems. +____ + +Democratic ideals will face ongoing challenges in practice. Actively +engaging with these issues could create a more resilient and democratic +organization that sublimates emerging power dynamics rather than ignores +them. + +[arabic, start=24] +. {blank} ++ +____ +Determination +____ + +*Untitled Co-Op is going to be primarily worker-owned and +worker-controlled, and it is going to do a lot of remote mob +programming.* + +We should remunerate workers based on how many hours they worked (within +health and safety limits), not when in the “hype cycle” they worked +them.footnote:[This compensation policy would apply specifically to +worker-members. For worker-members, everyone would receive the same +hourly wage and the same rate of equity distribution (although any +dividend payouts would be proportional to equity held). User-members +would have a different incentive structure, potentially including +patronage dividends, usage-based benefits, or a distinct class of +membership shares. This approach aims to balance fair compensation for +workers with meaningful engagement for users, while maintaining the +cooperative's core principles. This policy draws partial inspiration +from Mondragón and partial inspiration from Oxide Computer Company +(https://web.archive.org/web/20240927021311/https://oxide.computer/blog/compensation-as-a-reflection-of-values/).] +(And managers are workers too - no more and no less!) Business ownership +should be distributed according to each worker’s contribution of time, +provided it is made in good faith. This approach is both more fair and +more fun. It incentivizes the success of the team, not just atomized +individuals. By limiting ownership of first-class shares to natural +persons and stake size to only what could be accrued by the hours +contributed by a natural person, we avoid overly-powerful actors that +would undermine democracy.footnote:[Like the 'unMonastery' experiment +that sought to apply monastic principles to modern tech challenges +(Schneider, 2018), we seek to bridge past and present in creating a more +democratic future.] We should study network effects and how to use them +to facilitate widespread human flourishing. Cooperatives need to +explicitly and constitutively reflect on how their formal and informal +structures and patterns affect behavior, ideas, and engagement of their +members. Cooperatives can embody democratic values, encourage care, and +build a sense of shared destiny — a plurality of commons where together +we shape our worlds through words and deeds. From b953d746783269dfe59e39a982cf2610b67c3b6e Mon Sep 17 00:00:00 2001 From: "Joshua G. Stern" Date: Sat, 2 Nov 2024 06:20:26 -0400 Subject: [PATCH 2/2] Update RFD0001.adoc Fixed some typos and reworked Section 9 --- RFD0001.adoc | 309 ++++++++++++++++++++++++++++----------------------- 1 file changed, 167 insertions(+), 142 deletions(-) diff --git a/RFD0001.adoc b/RFD0001.adoc index eae9a4f..1bc274c 100644 --- a/RFD0001.adoc +++ b/RFD0001.adoc @@ -1,6 +1,6 @@ *Why a Worker-First Software Cooperative?* -*(RFD #2, Untitled Co-op)* +*(RFD #1, Untitled Co-op)* “[T]he political realm rises directly out of acting together, the ‘sharing of words and deeds.’” Hannah Arendt, The Human Condition, p. @@ -368,7 +368,8 @@ technology research and development cooperative founded in 1974. Ikerlan's governing membership comprised both workers and user-customers. Initially, the user-customer members were other Mondragón cooperative firms, “though later, conventional firms were also -admitted into this stakeholder group.”footnote:[Ibid at 300.] +admitted into this stakeholder group.”footnote:[Imaz, Freundlich, and +Kanpandegi, 2023 at 300.] Adopting a second-degree cooperative structure similar to Ikerlan's could allow the cooperative to establish formal relationships with other @@ -507,8 +508,26 @@ As these various components matured and proved their value, they could become more comprehensive. The educational initiative could become a recognized training program or even partner with existing institutions, the mutual aid fund could develop into a chartered -bank[multiblock footnote omitted], and the second-degree cooperative -structure could expand to include a wider network of organizations. +bank[multiblock footnote omitted]^,^footnote:[The transformative +potential of cooperative banking extends beyond software. Consider +semiconductor manufacturing: while conventional wisdom suggests that the +capital intensity of semiconductor foundries (>$20B for a leading-edge +fab) necessitates corporate ownership structures, this assumption +reflects current financial constraints rather than technical or economic +laws. A state-chartered cooperative bank could provide +non-self-amortizing loans to a worker-owned semiconductor foundry, +treating it as critical infrastructure rather than requiring commercial +returns. Such a foundry could achieve TSMC-level technical excellence +and economies of scale while operating under democratic ownership. This +isn't purely theoretical - the Tennessee Valley Authority demonstrates +how public financing can sustain technically sophisticated, +capital-intensive operations. The key limitation isn't technical +capability or economic efficiency, but rather our institutional +imagination regarding how to finance public goods. The same principles +could apply to other capital-intensive infrastructure like data centers, +telecommunications networks, or energy systems.], and the second-degree +cooperative structure could expand to include a wider network of +organizations. [arabic, start=6] . {blank} @@ -554,16 +573,16 @@ software cooperatives could market to larger enterprises with sympathetic values, e.g., B Corporations. For example, a federation of software cooperatives could collaboratively -create and maintain open-source platforms analogous to -GitHub.footnote:[Some GitHub alternatives, such as Codeberg, already -exist.] These platforms would be designed to better accommodate -collaborative ownership models. Or, cooperatives could unite to develop -artificial intelligence technologies that prioritize explainability, -dependability, and alignment with public interest over corporate profit -motives. By applying production analysis techniques, and -inter-cooperative governance structures, cooperatives can ensure these -technological projects are economically viable and competitive with -traditional alternatives. +create and maintain open-source platforms analogous to GitHub. (Some +GitHub alternatives, such as Codeberg, already exist.) These platforms +would be designed to better accommodate collaborative ownership models. +Or, cooperatives could unite to develop artificial intelligence +technologies that prioritize explainability, dependability, and +alignment with public interest over corporate profit motives. By +applying production analysis techniques, and inter-cooperative +governance structures, cooperatives can ensure these technological +projects are economically viable and competitive with traditional +alternatives. This approach both addresses practical concerns and challenges fundamental economic assumptions. By questioning assumptions such as @@ -874,224 +893,230 @@ ____ Mondragón's history underscores the importance of maintaining connections with broader labor movements and fostering internal solidarity, even as organizations grow and evolve. As Kasmir notes, -"After the Ulgor strike [leaders were fired via a majority vote], +"After the [1974] Ulgor strike [leaders were fired via a majority vote], cooperators had the reputation of not expressing solidarity with the rest of Mondragón's working class, and they were seen as increasingly isolated in their own privileged work world." The 2013 collapse of Fagor Electrodomésticos provides crucial lessons -about how solidarity can become dysfunctional when separated from -integrated decision-making processes. As Ortega and -Uriartefootnote:[Ortega Sunsundegi, I., & Uriarte Zabala, L. (2015). -Reios y dilemas del cooperativismo de Mondragón tras la crisis de Fagor -Electrodomésticos. LANKI, Instituto de Estudios Cooperativos, Mondragon -Unibertsitatea. Retrieved from http://www.lanki.coop] (2015) explain: +about how solidarity mechanisms can become disconnected from effective +decision-making. While the cooperative maintained formal democratic +structures and inter-cooperative support systems, there emerged what +Ortega and Uriartefootnote:[Ortega Sunsundegi, I., & Uriarte Zabala, L. +(2015). Reios y dilemas del cooperativismo de Mondragón tras la crisis +de Fagor Electrodomésticos. LANKI, Instituto de Estudios Cooperativos, +Mondragon Unibertsitatea. Retrieved from http://www.lanki.coop] (2015) +describe as a growing divide between workers and what was nominally +their own enterprise. This organizational separation reflected deeper +ideological transformations: -"Se puso excesivo énfasis "Excessive emphasis was placed +Las influencias de lo que algunos han The influences of what some -en el aspecto jurídico de on the legal aspect of +llamado "la izquierda fordista" son have called "the Fordist left" -la participación en disputas participation in assembly +palpables en este sentido. Es esta are palpable in this regard. -de asamblea y muy poco en disputes and too little on +una cultura de la izquierda que se This is a leftist culture that -la fertilidad creativa de the creative fertility of +expande en la fase del capitalismo expands in the phase of welfare -la participación del worker participation in the +del bienestar, para quien los capitalism, for whom the factors -trabajador en el propio workplace itself." +factores del desarrollo económico of economic development are -puesto de trabajo." +son un hecho dado al que no merece considered a given that does not -This separation between formal participation and workplace integration -became particularly problematic during the 2007-8 financial crisis, when +la pena prestar demasiada atención, merit much attention. It focuses -"la caída del 65% del mercado "The 65% collapse of the Spanish +y que centra su acción en una instead on a dynamic of demands, -español provoca una reducción market caused a reduction in +dinámica reivindicativa en pos de pursuing greater gains and -en la facturación de FED de Fagor Electrodomésticos' revenue +mayores conquistas y derechos para rights for the working class in -800 millones de euros (de los of 800 million euros (from +la clase trabajadora en la lucha the struggle for a fairer -1.800 millones de euros en 1.8 billion euros in sales +por el reparto de la riqueza distribution of the economic -ventas alcanzados en el 2006 achieved in 2006 to 1 billion +económica generada. wealth generated. -a los 1.000 millones de euros in 2008)" +This pattern implies a breakdown of integrated decision-making. The +authors reveal how deeply this separation has been naturalized when +discussing challenges on the Governing Council, which is composed of +worker-members who maintain their regular jobs while serving on the +council: -euros en 2008)" +En estas circunstancias no es In these circumstances, it is -The crisis exposed how managerial structures had gradually separated -from democratic governance, creating conditions where worker solidarity -became defensive rather than constructive. This organizational -separation reflected deeper ideological transformations. As Ortega and -Uriarte explain, the cooperative experienced a fundamental shift in how -workers conceived their relationship to the enterprise: +extraño oír voces que explicitan not unusual to hear voices -"En estas nuevas condiciones "Under these new conditions +la falta de conocimientos highlighting the lack of -se afirma que el pensamiento it is affirmed that cooperative +y de competencias suficientes knowledge and adequate skills -cooperativista entra en thinking enters into decline +de los miembros de este órgano, of the members of this body, -declive y las influencias de and the influences of what +cuando en situaciones muy who, in very complicated -lo que algunos han llamado some have called 'fordist +complicadas, tienen que tomar situations, are required to -'la izquierda fordista' son left' are palpable in this +decisiones muy difíciles sobre make very difficult decisions -palpables en este sentido. sense. This is a culture of +temas que en ocasiones tienen on issues that sometimes -Es esta una cultura de la the left that expands in the +una dimensión técnica no fácil involve a technical dimension -izquierda que se expande en phase of welfare capitalism, +de comprender that is not easy to understand -la fase del capitalismo del for whom the factors of +While Ortega and Uriarte propose giving council members more time and +support - reasonable tactical solutions - their framing implicitly +accepts a problematic division between technical and social expertise +that should never have existed in the first place. Instead of workers +participating meaningfully in strategic choices about their enterprise's +future, and seeing themselves as responsible for the enterprise's +sustainability, they increasingly related to management as traditional +labor, focused on defending benefits from an apparently separate +management structure, rather than engaging with fundamental business +challenges. -bienestar, para quien los economic development are a +This ideological separation reinforced and was reinforced by the growing +operational divide between technical and social governance. This +disconnect became particularly problematic during the 2007-8 financial +crisis, when: -factores del desarrollo given fact that doesn't merit +la caída del 65% the 65% drop -económico son un hecho dado too much attention, and that +del mercado español [provocó] in the Spanish market -al que no merece la pena centers its action on a +una reducción en la facturación [had] led to a reduction -prestar demasiada atención, demanding dynamic in pursuit +de FED de 800 millones de euros in FED's turnover of -y que centra su acción en of greater conquests and +(de los 1.800 millones de euros 800 million euros (from -una dinámica reivindicativa rights for the working class +en ventas alcanzados en el 2006 1.8 billion euros in sales -en pos de mayores conquistas in the struggle for the +a los 1.000 millones de euros in 2006 to 1 billion euros -y derechos para la clase distribution of generated +en 2008). in 2008). -trabajadora en la lucha por economic wealth." +The global financial crisis not only devastated sales but exposed the +deeper cultural transformations within the cooperative. As Ortega and +Uriarte explain: -el reparto de la riqueza +Este proceso coincide, a su vez, This process coincides, in turn, -económica generada." +con el relevo de la primera with the transition from the first -This shift toward what the authors call "fordist left" thinking is -particularly significant - workers began to see themselves as labor in -opposition to management rather than as integrated worker-owners -collectively responsible for the enterprise's sustainability. Rather -than engaging with the complex dynamics of maintaining a cooperative -business, worker consciousness shifted toward a more traditional model -of claiming rights and benefits from an apparently separate management -structure. This ideological separation reinforced and was reinforced by -the growing operational divide between technical and social governance. +generación de directores por una generation of directors to a new -The global financial crisis not only devastated sales but exposed deeper -cultural transformations within the cooperative. As Ortega and Uriarte -explain: +nueva generación de perfil "más generation with a "more technocratic" -"Este proceso coincide, a su "This process coincides with +tecnócrata" y en el que el carisma profile, where the charisma and -vez, con el relevo de la the replacement of the first +y la capacidad de liderazgo que leadership qualities attributed to -primera generación de generation of directors by a +se atribuyen a las generaciones previous generations are gradually -directores por una nueva new generation with a 'more - -generación de perfil 'más technocratic' profile, where - -tecnócrata' y en el que el the charisma and leadership - -carisma y la capacidad de capacity attributed to - -liderazgo que se atribuyen previous generations were - -a las generaciones becoming diluted." - -anteriores se van diluyendo." +anteriores se van diluyendo. fading. This transition led to what some veteran members characterized as "cooperativismo neoliberal": -"el pensamiento cooperativista "cooperative thinking enters +En estas nuevas condiciones se afirma In these new conditions, it is -entra en declive y se abre into decline and gives way +que el pensamiento cooperativista said that cooperative thinking -paso a 'un sistema to 'a neoliberal cooperative +entra en declive y se abre paso "un is in decline, and a "neoliberal -cooperativista neoliberal' system' in which people +sistema cooperativista neoliberal" cooperative system" is emerging, -en el que la gente empieza begin to think more about +en el que la gente empieza a pensar in which people begin to think -a pensar más 'en la cartilla, 'the bankbook, about money, +más "en la cartilla, en los dineros, more "about their accounts, about -en los dineros, en los about interest rates and +en los intereses y no en la money, about personal interests, -intereses y no en la not about the cooperative.'" +cooperativa". and not about the cooperative." -cooperativa.'" +This transformation might parallel what Hopper & Hopper term +'(so-called) Experts' - MBA-trained managers who prioritize financial +metrics over operational knowledge and integrated +decision-making.footnote:[While Ortega and Uriarte's description of the +'more technocratic' new generation of directors and the subsequent +decline of cooperative thinking in favor of financial considerations +suggests similar patterns, we would need more detail about these +managers' backgrounds, training, and specific approaches to be confident +of such an equivalence.] The shift Ortega and Uriarte document aligns +with broader patterns Hopper & Hopper identify in the degradation of +managerial practice. The solidarity mechanisms of the broader Mondragón network, while -well-intentioned, may have inadvertently enabled this dysfunction. -According to one cooperative manager: - -"todas estas ayudas no han "all this aid may have had +well-intentioned, may have inadvertently exacerbated this dysfunction. +According to some interviewees, inter-cooperative monetary aid may have +had -tenido un efecto anestésico, an anesthetic effect, in +un efecto anestésico, an "anaesthetic" effect — -en el sentido de que han the sense that they have +en el sentido de que meaning it may have -evitado una reacción más prevented a more forceful +han evitado una reacción más prevented a stronger response -contundente por parte de reaction from the cooperative, +contundente por parte de la from the cooperative. They -la cooperativa, y el and the thought that if +cooperativa, y el pensamiento also think that if there had -pensamiento de que si there had been somewhat less +de que si hubiera habido hace been a little less solidarity -hubiera habido hace años solidarity years ago, they +años algo menos de solidaridad years ago, perhaps Fagor -algo menos de solidaridad might have acted, perhaps, +se hubiera actuado, quizá, de Electrodomésticos would have -se hubiera actuado, quizá, in a more responsible way +una manera más responsable acted more responsibly by -de una manera más pushing Fagor Electrodomésticos +empujando a Fagor being "pushed to do its -responsable empujando a 'to do their homework.'" +Electrodomésticos "a hacer homework." -Fagor Electrodomésticos - -'a hacer sus deberes.'" +sus deberes". These challenges culminated in a profound disconnect between workers and what was nominally their own enterprise. The authors note: -"Uno de los hechos que "One of the facts that +Uno de los hechos que especialmente One of the facts that was + +llamaba la atención en el contexto especially striking in the -especialmente llamaba la especially drew attention +de las manifestaciones, las context of the demonstrations, -atención en el contexto de in the context of the +declaraciones públicas y entrevistas public statements, and media -las manifestaciones...era demonstrations...was the +en los medios de comunicación de interviews of Fagor -la gran distancia que great distance that members +socios de Fagor Electrodomésticos, Electrodomésticos partners was -reflejaban los socios showed toward what, at +era la gran distancia que reflejaban the noticeable distance that -respecto a lo que, en cuanto least in terms of ownership, +los socios respecto a lo que, en the partners displayed regarding -a la propiedad por lo menos, was their own business +cuanto a la propiedad por lo menos, what, at least in terms of -era su propio proyecto de project." +era su propio proyecto de empresa. ownership, was their own -empresa." +business project. This pattern, where workers react to decisions rather than participating in their formation, continues to manifest in contemporary tech organizations. Like Fagor's workers, OpenAI employees lacked the integrated context needed for genuine strategic participation when OpenAI's board briefly removed Sam Altman as CEO in 2023. As suggested -above in section 5, workers' immediate solidarity with the Altman seems -to have prevented deeper consideration of governance issues. Both cases -demonstrate how formal deliberative structures, when separated from -day-to-day operational integration, can lead to strategic blunders. +earlier in section 5, workers' immediate solidarity with the Altman +seems to have prevented deeper consideration of governance issues. Both +cases demonstrate how formal deliberative structures, when separated +from day-to-day operational integration, can lead to strategic +blunders.footnote:[Admittedly, 2007-era consumer appliance manufacturing +at the world's largest industrial worker cooperative is a different +context from a 2023 GenAI Silicon Valley startup.] Our proposed ensemble programming and rotation practices aim to address these failure modes directly by preventing the separation of technical @@ -1213,7 +1238,7 @@ build a robust culture of skillful communication, and practice thoughtful, interdisciplinary research and development.] working people — _not_ just the founders — as rockstars. Not everyone has fully articulated their rock-stardom, but everyone has it in them (caveated by -footnote 62). Leadership co-creates the stage.footnote:[One way to +footnote 64). Leadership co-creates the stage.footnote:[One way to counteract structural biases towards commons enclosure by capital would be to prevent potential 'rug pulls' in open-source projects. A software cooperative could (a) adopt the Mozilla Public License (MPL) or Affero @@ -1232,7 +1257,7 @@ ____ Important Side Note on Professionalism, Propriety, and Profanity ____ -If you read footnote 62, you encountered the word _asshole_. We used +If you read footnote 64, you encountered the word _asshole_. We used this word because we believe it is the best tool for the job. Later, in section 16, we use the word _bullshit_, referencing David Graeber’s brilliant formulation “bullshit jobs.” Our philosophy on profane words @@ -1686,9 +1711,9 @@ relationship experience before taking on single contact responsibilities. Financial operations have regulatory requirements for clear -accountabilityfootnote:[Allen Holub has a thought-provoking blog post -that problematizes the emphasis placed on accountability in workplace -and corporate culture (#NoAccountability, 11 July 2022, +accountabilityfootnote:[Allen Holub problematizes the emphasis placed on +accountability in workplace and corporate culture (#NoAccountability, 11 +July 2022, ). It stands in some tension with Hopper & Hopper’s approving quotation of Florence Nightingale: “someone has to be in charge”. What they and she @@ -1978,7 +2003,7 @@ Happened. Notes on the Crises Blog, 24 Sept 2024. ] inspires us to suggest inclusive emergency lending. The Federal Reserve's 1973 plan to provide emergency liquidity support to the entire -Savings & Loan industry via the Federal Home Loan Banks^78^ demonstrates +Savings & Loan industry via the Federal Home Loan Banks^80^ demonstrates the potential for central banks to support specific economic sectors. Cooperatives could advocate for the inclusion of worker-owned enterprises in such emergency lending programs, ensuring they have