Public Service User Cooperatives

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Tommasso Fattori:

"The pre-neoliberal public service institutions (that is, those existing prior to the waves of change turning bodies subject to public law into bodies subject to private law, that is, into joint-stock companies, be the capital private, mixed or even 100% public) share with cooperatives and consortia the fact that they do not pursue maximization of profits. In this particular type of cooperatives, consortia or other similar organizations for self-production of services, the producer-members and the users-clients must be the same people; the democratic principle of one head, one vote is also used, not the private-style principle by which the weight of members in decision-making is determined according to the percentage of the total company capital each member owns. The only way to be able to enjoy the value created by the cooperative is hence that of using and sharing the services collectively produced, while no profits can be distributed. One should also take into account the enjoyment of the positive externalities generated for the whole community by commoning, starting from the protection of the environment and its resources and the increase of local knowledge: in services related to natural resources, this is a decisive element. Where size is limited, cooperatives and consortia use mainly volunteer work and their strongest asset is their knowledge of and relationship with the territory. If one thinks of complex sectors such as health care or public transport, it is absolutely clear that it would be extremely impractical to go down this road. There would also be delicate questions as to its desirability for the potential users-commoners: indeed, these are organizational formats which require a lot of commitment in terms of time and energy, and they can also, as we will see later, bring problems over distribution. It is no coincidence that the social movements are essentially battling for the commonification of the public institutions supplying the services, and not for their closing down and replacement by fully self-managed organizations: they do not want total disengagement of public administrations from the supply of services.

It is well, however, to remember that cooperative forms of commoning are growing and enjoying success in the fields of producing energy from renewable sources and those which are traditionally used for managing natural resources such as water, particularly for the management of small-sized water networks, at a local and municipal level. In Italy, for example, most of the water consortia which exist today were created by the local inhabitants of certain areas getting together, who first identified the sources and then they themselves created the infrastructure to distribute drinking water. If we think about it, these are traditional forms of commoning, where the commoners are the inhabitants of a territory and have put together rules and an organization to supply drinking water to villages and hamlets dotted around the territory, through voluntary work. There are also examples on a larger scale: the largest cooperative in the world that provides water and sewerage services is in Santa Cruz, in Bolivia, and serves approximately 750,000 residents. But as we will see, the risk in large-scale cooperatives is that bureaucratization can creep in, with verticalization and mechanisms for permanent delegating, falling precisely into both those forms of implicit privatization of decision-making which characterize the degeneration of public management, and into more or less blatant mechanisms of profit accumulation by managers and executives.

In the USA, users’ cooperatives, where the citizen-users group together, are highly developed, particularly in the energy and water services sector. In Germany, Denmark and other European countries, more and more groups of citizens are self-organizing to produce energy. In Italy, as said before, there are cooperatives and consortia managing water resources in small towns or in particular types of territory, often in the mountains. In order to better understand these forms of self-organization, it will be better to give a few examples. As is obvious, the specific and most suitable type of cooperative for the production and management of a commons is that in which the members are both producers-operators and client-users: that is, the two communities must be co-extensive and the user is at the same time the producer and the decision-maker. In the case of producing energy from renewable sources, the commoners are also the owners of the production system (in very rare cases, they also own the power grid). It is easy to imagine the problems which arise here – and do not arise as far as commonification of public bodies is concerned – starting from the need, for user-commoners, to invest an initial capital that not everyone might possess but which could be compensated for and replaced by time spent working for the cooperative, or other forms of non-monetary contribution decided by the user community. In Belgium the cooperative Ecopower has 30 thousand members, who are both owners of the installations and users of the energy produced: the community of users is coextensive with the decision makers and a considerable number of them were involved in the design of the production installations. But among the forms of commoning for the production of power, the most important things are the ends and the values of the cooperative action: decreasing consumption, operating the transition from fossil energy to renewables, procuring all the energy required for the territory within that same territory, a sort of power autarky. One could cite, for example, the Energie-Erzeuger-Verbraucher-Genossenschaften: integrated organizations through which a community attempts to reach self-sufficiency in power, as is the case of the Bioenergiedoerfer, the bioenergy villages. In Jühnde, in Germany, a cooperative has been set up to this end, 75% of the members of being the residents of the village, and which produces both electric power and heat energy from the biomass present in the village, deriving from agriculture, animal husbandry and forestry." (source:draft of manuscript)


Problems with wholesale cooperative self-production of certain public services

Tommaso Fattori:

"In the cooperative model of commoning, the service is run by the community through organizational structures comprising only user-members (one should not forget that there are also cooperatives which serve almost exclusively non-members, and these are forms which have little to do with commoning). There are various risks associated with experiences of commoning in the production of services through cooperatives, consortia or similar collective institutions, and they increase in proportion to their size.

First of all, there is the risk of drifting towards a substantial corporatization of the organization, which tends to follow the typical administrative structures of businesses, with the consequent internal verticalization.

Where the service is organized on a small scale and is based on voluntary work, there can be problems in finding a sufficient number of people willing to dedicate time and energy to producing the service, even in rotating shifts, with the risk of loading excessive responsibility and work onto the shoulders of a small nucleus of people. Another risk is that of the user community not having within it the required technical capacities to carry out duties necessary to produce the service.  Finally, in many sectors - for example those connected to care services or nursery schools - one must beware of the risk that a political use of commoning is made to justify cuts to public spending, replacing what used to be guaranteed by welfare services with voluntary work and relegating whole sets of services to another form of “private”, which is different from market and private enterprises: the private sphere, the family, with the burden of exploitation of female labour that this often entails.1 In many cases the most reasonable solution is hence to commonify the public institution which supplies the services, which must be guaranteed sufficient funds and allocations, rather than proceeding to replace them with forms of self-organizing and wholesale self-production of the service.

There is also a significant problem concerning distribution. Many essential public services are capital-intensive and require substantial investments in infrastructure (think of transport, water services and other grid services; of hospitals, university and research facilities, etc.). If one were to accept a principle of wholesale commoning by the users, this would meet the ambitions of those who favour drastic cuts to public social spending, in line with the “Big Society” model: the full costs of the services, starting from extraordinary infrastructure investments, would be borne directly by the commoners in a specific territory or in a specific service, with no contribution at all from general taxation; this would have an impact on distribution both within social classes and nationwide. Not to mention the problem of ensuring minimal vital quantities to all. In other words,  what we were trying to get rid of would come in again by the back door: the regressive principle of full cost recovery, which passes on all costs – including infrastructure – directly to users, with no concern for unequal incomes and territorial differences, that is, with no social solidarity or shared responsibility. Indeed, one should not forget that when an essential service is financed solely by the direct contribution of the users (through social quotas, tariffs, etc.), the impact is always regressive and consequently, in proportion, the poorest pay more for the costs of the service and investments in infrastructure. It is no coincidence that one of the main reasons for failure of the pure forms of commoning for self-production of public services is the same reason for which citizens oppose privatization: in many water consortia self-managed by the users “members often do not accept that they must finance any extraordinary interventions”.2 Just as the commonification of a public service institution challenges the full cost recovery principle at its root, so too in the case of self-production of the service by the users, at a minimum, transparent forms of public-common partnership must be designed3 which will allow for controlled allocation of public funds to finance extraordinary investments and access to essential quantities of essential resources, regardless of the purchasing power and income of citizens. The problem of the high costs of the service does not present itself in traditional forms of commoning, where the resources act as natural infrastructures, nor in many forms of producing digital commons, where social cooperation and voluntary intellectual or cognitive work are at the heart of the system. On the other hand, for public services, this cost problem does exist and it is necessary to implement distribution policies which allow everyone to enjoy the common good.

Finally, a key element in commoning is obviously self-government and the participation of the users-producers in decision making, in defining the rules for the use and sharing of the commons and in its production-management. However, the most recent surveys confirm that the participation of members in the running of user cooperatives is not very high. On the contrary, in most cases, there is a marked tendency to abuse of the power of proxy. Paradoxically, it may sometimes be a positive element such as trust in the delegates which is behind it, especially in small local situations, where direct personal relations are strong. More frequently however, it is a question of a deeper problem, connected to the general disaffection for participation caused by various concauses: a lack of time, precarious and difficult working conditions, the high degree of urbanization of the land, the complexity of technical or infrastructure issues. These and other elements make it difficult or impossible – think of the inhabitant of a contemporary metropolis – to   wholly self-manage and self-produce fundamental public services, bypassing public bodies, town councils and publicly-owned companies (or managing without public funds to finance large infrastructure works). So in such cases we return to the course of commonification of public services as the way to go, as it does not involve cancelling public bodies but their evolving and being transformed through the introduction of “common” elements.

Problems concerning participation in general and the participatory structures for managing services

Tommaso Fattori:

A crisis in participation, or a renaissance?   Participation is also one of the central pillars in the process of commonification of public institutions which supply services: the issues of participation mentioned above in relation to self-production of services are also encountered, although in a milder form, in the commonification of public services.  

On one hand, we are currently witnessing a general participatory crisis, which is also a crisis for participation and direct democracy: a crisis related to current mode of existence, lifestyles and naturally also to the multiform crisis of representative democracy. On the other, we observe the emergence of strongly-rooted social movements which demand the commonification of public services: the prime example being the Italian water movement.5 There is also a burgeoning of new practices of commoning – which imply voluntary forms of participation, although of varying levels and intensity –in “projects” and in the production of digital commons, from free software to Wikipedia. And there are new methods of local participation and commoning: think of urban gardening, cooperative efforts in which it is simpler to achieve direct verification of the effectiveness of this collective action.  These are all practices which broaden the horizon of democracy and political participation. Human beings are capable of cooperative actions and they are able to sacrifice short-term personal interests in the name of long-term individual and group benefits, in order to achieve a group goal or provide a social service. However, this does not mean automatically taking for granted that citizens will be willing to take on additional burdens and responsibilities for the governance and management of the services, although by so doing they would gain greater collective benefits. In addition to the “republican or Athenian citizens”, there are also passive citizens and those who are not necessarily willing or motivated to commit themselves personally6; not to mention how difficult participation is for broad swathes of the population because of their objective living conditions, as mentioned above. Furthermore, individual motivation to participate may vary considerably according to what service is involved: sometimes one is more motivated to get involved when the service is perceived as vital or important for oneself and one’s nearest and dearest, for example.

Participation in the management of a school, of the water service or of a hospital presents in any case very different sets of issues, but it is certainly significant that in the midst of a time of weakening of collective participation and widely-acknowledged crisis of the traditional forms of democracy, there should be pressure going against the tide, and towards the reconstruction of forms of innovative democracy, starting precisely from public services. These are needs and claims which can in many ways be linked to the traditional claims for social democracy, that is, to move from democracy in the political sphere to democracy in the social sphere: the real degree of democracy depends on the growing democratization of spaces otherwise dominated by hierarchical and bureaucratic organizations.7A road which is the exact opposite to that opened by the current processes of privatization of public services, which bring with them, above all else, the privatization of decision-making and the distancing of citizens from the decision-making area.

It is important however, to avoid an irenistic and a-problematic approach to participatory activities and commoning, which are conflictual social processes. Participation is, among other things, mostly a selective process, that is, one that risks excluding the weakest voices from the participatory arenas (these may be in turn women, migrants, the poorest or the least educated). Unfortunately there is no shortage of examples of this even in the commons area, both in the traditional natural commons and in digital commoning. It is necessary to be aware of this in order to structure forms of commoning which are genuinely open, inclusive and practicable by all. Commons, therefore, open up the great political issue of the organization of decision-making power. In a commonified public service, how is it possible to actually organize participation in stable, inclusive and workable forms? How does one organize the relationship between direct and delegated democracy? How does one identify the reference community each time? Is the reference community for health as a commons, for example, the local community – perhaps connected to a specific healthcare structure – or the national one, or maybe even global? Is real participation possible on any level above the territorial? The actual organization of commonified public services must therefore provide for diversified participatory solutions from service to service, to be identified each time through collective processes. What is certain is that everybody nowadays is simultaneously part not of one, but of several reference communities (for example, the school they send their children to, the urban transport they use, the hospital they go to for treatment). These are mainly porous and fluid communities, whose members change continually. The desirable forms of participation must be identified collectively in an intelligent and “sustainable” way for everyone. Moreover, only by giving greater responsibility and partially turning the citizen into a commoner – guardian, beneficiary and him/herself direct producer of commons at the disposal of all – is it possible to move from the needs and rights of the present generation to those of future generations."