Sunday, 17 August 2014

Community energy cooperatives: "bootstrapping the alternative economy"

It seems we need to take stock of where we are when it comes to local generation and control of our energy supplies:
Futures Forum: Community energy cooperatives: a confusing picture in UK
Futures Forum: Community energy cooperatives: "Most of the wind projects in Denmark are still locally owned and local green energy co-op based schemes have spread across Europe, notably in Germany."

Here are excerpts from an article published in the Resilience magazine last year 
- on the theory and practice of energy cooperatives within the context of technological innovation:

New Tech as a Force Multiplier and Equalizer: 

Bootstrapping the Alternative Economy

by Kevin Carson, originally published by Center for a Stateless Society | Oct 10, 2013


The electric cooperative industry in the United States has the human, political, social, built and financial capital to not only compete with transnational energy conglomerate, but to pool its vast array of social and material resources to innovative the energy sector and democratize it. The United States has over 930 electric cooperatives, 864 of them providing distribution of power to regional and local communities. The remaining cooperatives (generation and transmission coops or G & T) generate energy, mostly through coal, and sold as a commodity to public and private market actors. These cooperatives are represented by the National Rural Electric Cooperative Association, providing invaluable information and resource pooling, which is critical for small-scale firms, like cooperatives, to survive (Ostrom, 2005).

Taken together, the cooperative sector has enormous potential to not only proliferate growth in renewable energy, but to also foster deep, meaningful community development. This is especially true given the technological developments of recent years, which amount to an enormous force multiplier for the resources available to the alternative economy and go a long way toward nullifying the conventional capitalist economy’s advantage in resources.

We are now experiencing a reversal of the previous shift: a transition back from expensive machinery to affordable, general-purpose artisans’ tools, accessible through cheap communications technology (the internet) and the open source movement that is essentially the world’s biggest coordinated DIY effort.

Technological innovation is in the process of making capital constraints irrelevant, and thereby nullifying the capitalists’ former privileged access to enormous amounts of investment funds (indeed, websites like www.kickstarter.com allows for small-scale projects to crowd-source financing and subvert the banking cartels). Thanks to the desktop revolution, as Tom Coates put it, “the gap between what can be accomplished at home and what can be accomplished in a work environment has narrowed dramatically over the last ten to fifteen years.” [Tom Coates, “(Weblogs and) The Mass Amateurization of (Nearly) Everything,” Plasticbag.org, September 3,2003].  Douglas Rushkoff commented on the superfluity of investment capital resulting from this... [Douglas Rushkoff, “How the Tech Boom Terminated Califormia’s Economy,” Fast Company, July 10, 2009].

The same thing is happening in physical production. Over the past twenty years or so, the minimum cost of machinery required for producing goods of “factory” quality has fallen by two orders of magnitude. Using assorted homebrew versions of CNC 3-axis cutting tables, milling machines, lathes and 3-D printers developed by hardware hackers, it’s possible for a garage shop with $10,000 worth of machinery capable of manufacturing goods that once required a factory costing hundreds of thousands of dollars. [See Kevin Carson 
The Homebrew Industrial Revolution | A Low Overhead Manifesto; Homebrew Industrial Revolution - P2P FoundationHomebrew Industrial Revolution , Chapter Five: “The Small Workshop, Desktop Manufacturing, and Household Production.”]

“Stigmergy” is a term coined by biologist Pierre-Paul Grasse in the 1950s to describe the process by which termites coordinated their activity. Social insects like termites and ants coordinate their efforts through the independent responses of individuals to environmental triggers like chemical trails, without any need for a central coordinating authority. [Mark Elliott 
M/C Journal: "Stigmergic Collaboration: The Evolution of Group Work"Why is Open Access Development so Successful? Stigmergic organization and the economics of information - ResearchGate]  Elliott contrasts stigmergic coordination with social negotiation. Social negotiation is the traditional method of organizing collaborative group efforts, through agreements and compromise mediated by discussions between individuals. The exponential growth in the number of communications with the size of the group, obviously, imposes constraints on the feasible size of a collaborative group, before coordination must be achieved by hierarchy and top-down authority. Stigmergy, on the other hand, permits collaboration on an unlimited scale by individuals acting independently. This distinction between social negotiation and stigmergy is illustrated, in particular, by the contrast between traditional models of co-authoring and collaboration in a wiki. Individuals communicate indirectly, “via the stigmergic medium.” [Mark Elliott, Stigmergic Collaboration: Some General Off-the-Cuff Reflections on Stigmergy]

Modular design is simply the stigmergic development of physical goods. It is a massive force multiplier because it spreads capital outlays for R&D out over as large a product ecology as possible. Common platforms can be customized among the widest possible variety of products, and modular components to be used over an entire product ecology. [Eric Hunting comment under Michel Bauwens,  
Phases for implementing peer production: Towards a Manifesto for Mutually Assured Production - P2P Foundation]

The revenue stream required to service ongoing costs is reduced, so there is reduced pressure for large-batch production and an increased ability to ride out long periods of slow business with no sunk costs to amortize. As a result, small manufacturers can produce on a lean, just-in-time basis, with output geared to orders and no need to maximize the utilization of capacity.

Federations of cooperatives like the electric co-ops, rather than purchasing wind and solar generating equipment—with expensive proprietary designs and oligopoly markups—from conventional high-overhead capitalist industry, can get more bang for the buck by financing their own open-source designs and producing them in partnership with garage factories like those participating in the 100kgarages project. The open-source designs, financed with capital pooled from the small contributions of many federated cooperatives, become a free library available to all.

An example from the 19th century is instructive in this regard. When manufacturers refused to sell farm machinery to the Grangers at wholesale prices, the Nebraska Grange undertook its own design and manufacturing of machinery. (How’s that for a parallel to modern P2P ideas?) Its first attempt, a wheat head reaper, sold at half the price of comparable models and drove down prices on farm machinery in Nebraska. The National Grange planned a complete line of farm machinery, but most Grange manufacturing enterprises failed to raise the large sums of capital needed.


The interlocking network of giant organizations includes not only the oligopoly corporation and government agency, but as Goodman pointed out, the large institutional non-profit: large universities, think tanks, and charities like the Red Cross and United Way. Goodman’s typology of organizations “cuts across the usual division of profit and non-profit,” as shown by the prevalence in the latter of “status salaries and expense accounts…, [and] excessive administration and overhead….” [Paul Goodman. People or Personnel, in 
People or Personnel and Like a Conquered Province] Indeed, Goodman defines the typical culture of the large organization largely in terms of those qualities, which stem largely from the nature of hierarchy, with work being divorced from responsibility, power or intrinsic motivation (as suggested by the contrasting spontaneous and frugal style of bottom-up organizations):

To sum up: What swell the costs in enterprises carried on in the interlocking centralized systems of society, whether commercial, official, or non-profit institutional, are all the factors of organization, procedure, and motivation that are not directly determined to the function and the desire to perform it. Their patents and rents, fixed prices, union scales, featherbedding, fringe benefits, status salaries, expense accounts, proliferating administration, paper work, permanent overhead, public relations and promotions, waste of time and skill by departmentalizing task-roles, bureaucratic thinking that is penny-wise pound-foolish, inflexible procedure and tight scheduling that exaggerate congingencies and overtime.

But when enterprises can be carried on autonomously by professionals, artists, and workmen intrinsically committed to the job, there are economies all along the line. People make do on means. They spend on value, not convention. They flexibly improvise procedures as opportunity presents and they step in in emergencies. They do not watch the clock. The available skills of each person are put to use. They eschew status and in a pinch accept subsistence wages. Administration and overhead are ad hoc. The task is likely to be seen in its essence rather than abstractly.

Goodman, taking the example of Columbia University, estimated the cost per capita if students hired instructors directly and paid market rents on the buildings, and found that actual tuition charges were “four times as much as is needed to directly pay the teachers and the rent! This seems to be an extraordinary mark-up for administration and overhead.”

Far from the system of “countervailing power” hypothesized by Galbraith, the large for-profit corporation, large government agency, and large non-profit in fact cluster together into coalitions: “the industrial-military complex, the alliance of promoters, contractors, and government in Urban Renewal; the alliance of universities, corporations, and government in research and development. This is the great domain of cost-plus.”

We seem to put an inordinate expense into maintaining the structure. Everywhere one turns… there seems to be a markup of 300 and 400 per cent, to do anything or make anything. 

New Tech as a Force Multiplier and Equalizer: Bootstrapping the Alternative Economy

See also:
pen Community Manufacturing: Key to an Equitable Society | Ingienous Designs

And from Resilience:
Community Energy in Ireland: The financial aspects
How America's Largest Worker Owned Co-Op Lifts People Out of Poverty

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