On Platform Coops: what the heck is a peer? And a community?

As I anticipated in the first post, I think that “Ours to Hack and to Own” is the best book out there to understand the emerging field of Platform Coops, and yet, I missed some important issues. Maybe this is precisely the virtue of the book: it reflects both the advancements and the weaknesses of this recent and growing movement.

The first problem I encounter is pervasive in all the writing out there on the sharing/collaborative economy and p2p theory: the lack of a clear and operational definition of what a peer is and what a community is. The truth is that we may need a “taxonomy” of peers and communities, since we call peers and communities in a wide range of different realities.

How do we recognize someone as a peer? I can be tempted, as we do often colloquially, to define my peer in terms of characteristics of the person (i.e. same hierarchical position, same knowledge, same skills, same values, etc.). But homogeneity is not what we find in peer relationships out there. Actually, we find more value in diversity. A peer is better understood not as someone that is like you, but as someone that you like. And if we think about organizations, as someone you would like to do things with.

Peers

This points out important consequences: a peer can only be defined as long as it has a peer; and what makes possible to call them peers is the existence of a certain kind of relationship. In this relationship, both feel comfortable with the idea of being peers, and this reciprocity can only be maintained as long as they both agree on which terms the idea of being peers is established. Therefore, the key aspect of the relationship is reciprocity in the agency of the parts.

The word agency comes from Latin agere that means “to do, to act in such way that has an effect”. Amy and John will be peers as long as they can define together what constitute their “peerness”, and this is the primary agency that regulates the rest of agencies once they recognize each other as peers. What makes them peers is that they are able to define what kind of reciprocity makes them peers, and consequently, what effect it has in what they can or cannot do because of this relationship. All human groups exist because they accept a list of dos and don’ts. But groups of peers can co-create them. Since doing is what constitute the very essence of a peer-to-peer relationship, that relationship will be freely established in terms that both parts will be capable to do more or different things thanks to it. A p2p organization empowers both parts through reciprocity. This way, the eventual common characteristics of the peers that form a p2p organization are not the reason that made them peers, but the consequence of being peers. But “peer” and “community” are buzz-words nowadays. For instance, there are plenty of communities in which participants are called peers but they are not. People join them and accept the “peer” label just because they get some value from being there, and no cost for being called “peers”.

This leads us to the core of the problem. In order to give stability to relationships, people need trust; a reasonable confidence in what we can expect from others to behave. We know from the sociological tradition that there are two kind of ties to build trust. The first kind are ties established through mechanisms of socialization and emotional engagement, while the second are ties established through the assumption that others will act according to rational and self-interest calculations. The first characterizes traditional communities, the second is the one that has shaped our modern societies. The first shapes communities that are protecting and comforting but also stiffly and rigid; the second shapes communities that are liberating and innovative but also alienating. Communities and societies present, at the end, a combination of the two types of ties, but our current economic system is based mainly in the second type, and they are dramatically corroding the first type. Some authors hypothesize that the tension between the two is provoking the emergence of collaboration. Others, just the simple collapse of our current societies, and we should not take collaboration for granted unless we work on it.

Peerness’ reciprocity is the obvious way to prevent relationships from being stiffing or alienating. This way, you may find egalitarian intentional communities with thick ties (which members share a roof and livelihood) or the community of torrent users with thin ties (which members hardly know each other), that they do not feel trapped or alienated by their communities.

So, then, what is a community? Traditionally, community is understood as a group of people that share something in common, but also, as the very conditions for sharing that in common in the first place. If peers share an agreement of what they want to do together, (and at the end, members of communities come and go!), then we better understand community as the set of institutions that builds the confidence/trust for doing things together.

We are ready to see a taxonomy of paradigmatic communities in the economic world:

Taxonomy of communities

We see four kind of different communities for which we do not have a name, but their paradigmatic examples are clear: a family business, a corporation, a kibbutz, and a consumers’ cooperative. They are “not peers with thick ties”, “not peers with thin ties”, “peers with thick ties”, and “peers with thin ties”. You may think, “and what about my peer colleagues in my department”? Well, you tell me. How are your relationships? Like members of a family? Like members of a corporation? Like members of a kibbutz? Or like members of a consumer coop?

Until now, each kind of community faced different limitations. For the sake of simplicity (I will refine this in my next post), let’s say that those communities based on “thick ties” had a limit of scale, being the Dunbar number their limit to growth without loosing their thick ties. Although they have the strong commitment of its members, they never had the critical mass to face big investments for major operations in order to compete with bigger organizations. On the other hand, communities based on “thin ties” have flourished and gained an outstanding influence, at the cost of the alienation of its members. Despite all their efforts for developing strong cultures (sic) and aligned missions and visions, and so on, Gallup found that “71% of American workers are “not engaged” or “actively disengaged” in their work, meaning they are emotionally disconnected from their workplaces and are less likely to be productive”.

Traditional limits

But technological development has changed and is still dramatically changing the economy through:

  • A reduction of the optimal scales of production
  • A reduction of transaction costs

What it is interesting is that the reduction of the optimal scales of production and transaction costs are affecting the four kind of communities very differently. The traditional “commitment-scale” trade off is vanishing, and this is the true cornerstone of what we call the collaborative economy:

New opportunities

So yes, we can look back to the book’s insights and agree with:

1. Centralized platforms’ business models are old wine in new wineskins, being the wineskins the new business models for rent-seeking.
2. Centralized platforms disempower its users, so they can capture all the value.

But then others deserve to be analyzed further:

3. Centralized platforms fake trust environments

Well, yes and no. They disguise as much as they can thin ties’ trust with the appearance of thick ties’ trust. But they deliver a trust environment; otherwise they would not exist.

And others become problematic, because they clearly do not apply to all Coop-Platforms…

4. The time for Coop Platforms may have arrived
5. Coop-Platforms can offer what centralized ones are pretending -but are not able- to deliver

…because they depend on the particular architecture of each coop-platform:

6. However, decentralization does not imply equality.
7. New decentralized architectures need to be designed to be counteranti-disintermediationist

And at the end, most of the Coop- Platforms discussed in the book are not designed to be counteranti-disintermediationist. This way, value will still be captured in a centralized way, despite…

8. Platforms are us: community is what gives value

For instance, it is true that Coop-Plarforms as Fairmondo, (which by the way, is a company that I LOVE), have set mechanisms for returning value to society, which leaves its community out of the equation:

Fairmondo 4/4 profit model

The usual justification is that some Coop-Platforms articulate community and society through special boards, because:

9. Coop Platforms are not as much for autonomy and independence as for multi-stakeholder interdependence.

And… we really must stop here. What is the role of the community in an multi-stakeholder interdependence scheme? I am afraid we cannot discuss multi-stakeholder interdependence if we do not look first at the “governance” of each kind of community that we described before. Otherwise, how could we rightly understand interdependence with other stakeholders?

This will be the object of discussion of my next post.

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