Are Coops Outdated in a Network Age

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NOTE: This was slightly modified by the author (Tiberius) on March 10, 2013, and after in April 2016. The reason is that this discussion from Facebook generated some interest and discussion on the side, and Tiberius wanted to make it more precise, while preserving the original idea.

by Tiberius Brastaviceanu:

"I think that the coop is as outdated as the corporation. It adds more democratic processes into our economy, and democratizing the economy will definitely improve our democracy. But coops aren't well-equipped to extract value from the long tail, which is at the core of the new p2p paradigm. They are boxes with well-defined boundaries, not open and dynamic networks.

For those who try to spread the coop model: The coop and the corporation have been competing for years now, and the corporation came on top. Is there anything new in the air to reverse the situation?

I have the impression that once coops or corporations bite on the Open Value Network model, i.e. they open up or they become an affiliate within a Value Network or they try to function like one, they will dissolve into a value networks.

Individuals can form networks to produce something valuable and to deliver it to society (the market). If we build an infrastructure that reduces (economic) transaction costs, that allows non-intermediated transactions, that provides fair systems for redistribution of benefits, commons-based peer production will flourish. There will still be a need for what I call boxes (corporations, coops and other such forms designed for an environment that is scarce in human resources and lucking effective information systems), but in the realm of knowledge production, or for knowledge intensive activities, networks will take over. This is my prediction...

We still have feudal systems today... old forms are here for long... but value networks at the individual level will become increasingly potent.

We can form an Open Value Network by putting coops together or by putting individuals together, or by mixing individuals with coops, with corporations, and even with other value networks. In these mixtures, I predict that individuals will quit power structures, if they can, to become independent affiliates to the same value network. In other words, individuals will prefer to work as individuals/affiliates within a network rather than as employees in corporations or coop members, within the same network. This disintegration of old structures within value networks will happen if the underlying infrastructure of the value network offers an acceptable level of security, which we believe will be the case. The economic nomad is on the rise in my opinion.

We already see this tendency, good and autonomous employees quitting their job to become independent entrepreneurs, to come back and sub-contract with the same company they used to work for. But there is more to it, based on my observations of Sensorica: First, I would like to mention that the Value Network model works at small scale. We are now designing and building the value network infrastructure to scale our success to larger networks and to networks of networks, thousands of individuals strong. The NRP-VAS treats individuals and organizations as independent agents or affiliates, with the same rights and responsibilities. Recently, Tactus Scientific Inc., initially a small company acting like one entity within the network, with its own goals, disintegrated into individual affiliates and became an empty shell. I am observing other organizations that interface with us and I see signs of the same phenomena.

I don't combat coops. I don't combat corporations. I just think they are outdated structures. Coops may be temporarily on the rise because people are looking for alternatives to corporations, and the reflex is to reach to something familiar but different. That is all good in the short-term, but I don't think that coops are adapted for what's coming, and I want to avoid a waste of time and resources going too far on the wrong path.

Again, if the infrastructure provides an acceptable level of security, if individuals are able to estimate their risks, value networks will drain their corporate and coop affiliates of their individuals talent. I am not saying all that to be mean... I am just describing the properties and effects of what we've created. My ultimate goal is to make the world a better place.

(The original, before modifications, was extracted from this Facebook discussion)