Switching to coops

More and more I got convinced of the power that a cooperative model can provide over the typical competition-based, profit-extracting model we see today. I do not believe people should always do everything for free, but I do think we need to make a distinction between fair pay and profit extraction. When a wage worker gets payed, we do not typically consider this profit. It’s just the wage they got in return for their time and labour. When we talk about a self employed person, we surprisingly do call that profit. When a bar owner (running their own bar) buys a keg for €180 and sells the beer for a total of €200, we say they made a €20 profit. But to me, both are really the same thing. The “profit” in this context, is really just the wage for the bar owner.

But it’s different when we talk about the so called “owning class” who doesn’t actually provides added value. A typical example is a landlord who buys a house using credit from the bank[1], let’s an agency handle the management, and uses the income to pay for everything, while still keeping extra money so they can take their fancy car to a fancy restaurant. Another example is the shareholder who buys some stock to later sell it for (hopefully for them) more money, while never creating a higher underlying value to what those shares represent.

The big problem is that this class doesn’t expect just a steady income from their labour, like the wage worker or bartender from our examples do. Especially in the case of the shareholder, they require the company they have shares from, to continuously and exponentially grow. If they bought a share at €100, they eventually want it to be worth more, say €200. But that means they need to someone to sell it to. And that person wont buy for €200 unless they can also expect a similar growth. Jason Hickel explains this better in the book Less is more. Due to the incentives at play in this for-profit model, we get the so-called “enshitification” of products and services.

When we want to change something, it’s important to think in systems. When you want more fish in a pond, it doesn’t suffice to throw in more fish, you have to change the system so more fish have room to live. Then you don’t even need to throw in more fish, a new balance will emerge on it’s own. Similarly, I don’t believe that the corporate system we currently have, is one we can fix with changing some limitations through rules or regulations. We need fundamental changes, an alternative system where a better equilibrium forms. Since I believe the fundamental problem lies with an owning class that is separate from workers and clients, a cooperative model could be a part of the solution.

Strategy

A couple of years ago, I decided I wanted to switch away from for-profits, preferably to more coops. The first thing I did was see where I have dependencies on for-profit companies. The next step is looking for alternatives. There aren’t always good alternatives, but even switching to something better seems like a good move. Since my main concern is the incentive that a shareholder-owned company has, and since the big problems start when they start to have a big market share[2], I can make some order in how “good” I consider an option to be. As a rule of thumb, I take the following order, where “1” is the best choice.

1. Client/worker owned coop who complies to the Rochdale principles, community ran projects, or products which can be considered part of the commons.
2. Coop-backed, although not per sé a coop itself.
3. Non-profit or small business where the bulk of the work is done, and will generally always be done, by the owner.
4. For-profit with smaller market share.

Note that I didn’t add a line for independence. E.g. if I buy food at a store, I have a dependence on that store. If I 100% grow my own seeds and food on my own land using only personally owned materials, I don’t have a dependency for food. I’m honestly unsure if being independent is better or worse than joining, and thus supporting, a coop. For now I’ll generally focus on dependencies I have on others. If I don’t have a dependency, then it’s simply out-of-scope. It should also be noted that a coop isn’t always the best choice. I believe that the democratic character of a coop model is needed to keep checks on ethics, but if the coop doesn’t have the same ethical framework as I have, then it may not be a good choice either. Ethical considerations are always important in any of the options, and it may very well be possible that a small for profit who acts ethically is better than a coop who acts very unethically.

Where and how to find alternatives

First, I listed my dependencies. I use software, I listen to music, I watch series and movies, I have internet domains, I need a sick-fund, a cell phone, phone carrier, computer, internet, car, several insurances, a bank, electricity provider, water provider, gas provider, I do groceries… A lot of things.

Some of these are intertwined with each other. I have a basic sick fund, but it also gives me a hospitalisation insurance, and I can’t switch away from the fund while keeping the insurance, and vice versa. I also have a bank where I have a mortgage credit, but to get lower interest rates, I also got several insurances there. I need to take these into consideration when switching as well.

Once I got some idea of what entities I’m dependent on, I needed to find alternatives. One thing I learned is that you need to think about services, not providers or packs. When I first looked for new providers for gas and electricity, I looked for an energy provider. I actually needed someone to explicitly point out that both can be from different providers. A similar thing is true for the typical internet+phone+tv packs.

To actually find alternative providers, there are many strategies I used. Sometimes you can find places online to compare different providers. Those are a good way to see what providers there are. Then it’s up to you to figure out what type of company they are and if it’s one you wish to join. You can also talk to people. I found different people I already knew who were already looking into these type of things. I just didn’t know it until I mentioned this and we started talking about it. Or maybe there’s a coop organisation in your region or country who promotes coops. Maybe you can find coops there. An interesting fact is that the .coop TLD is only provided to coops and similar projects. DotCooperation, who owns the .coop TLD, has a directory of coops with that TLD. And when you use a search engine, you can often tell it to only look for pages on a specific domain. If you want to look for cute kittens on example.org, you can typically search with site:example.org cute kittens. But, thanks to how domains work, this can also be used to look for sites with a specific TLD. If you want to look for shops who have a site using the .coop TLD, you can do site:coop shop.

Note that the products or services of a coop will not always be better, nor will they always be cheaper. In some cases it can be so, but sometimes they are still small and young and the advantages over a bigger for-profit haven’t kicked in yet. Or the problems of monopolistic entities haven’t ingrained that part of the market yet, and the for-profits are still providing good services for a competing price. The reason to switch isn’t for short term gain, it’s an investment for the future of all of us. And, as said before, the ethics may not always align. For example, I found a coop through where I could buy cheap energy, but they were mostly focused on cheap energy doing bulk orders. My aspirations are somewhat more ambitious than just getting cheap power. If I want to help change the world for the better, I need an energy coop who actually pushes for real ecological changes (spoiler: I found one).

Doing it

For software I generally use FLOSS. This software is often build and made by a community, and I consider Free Software, and the wider Free Culture movement to be intrinsic cooperative. Therefor this is a good choice by default. Similarly, I use online services based on free and openly licensed software and resources, preferably ran by myself, trusted individuals, or democratic and community based projects.

For music, I mostly look for artists who release their music under a Creative Commons license. A Creative Commons license isn’t always a free culture license, but I consider it acceptable for now. I mostly use Jamendo as a source, but that’s a for-profit, not a coop in any way. At least, as far as streaming goes, I assume it’s one with a smaller market share, so that’s still better than joining one of the typical streaming services. And I can download the music, so most of the time I don’t actually use the service any how. I would like to support the artists more, but Jamendo is mostly supporting through licensing for use in projects, not by donations or selling merch or w/e. I’ve looked up several bands I like, but often they simply don’t exist any more. I wish supporting them was easier. I think Bandcamp is better for that, and they allow artists to release under a Creative Commons license. But I don’t find a good way to filter songs released under such license, so I don’t really use it much. I also often go to shows of smaller, more local, bands. And if I like them, there’s a chance I’ll buy merch there.

For movies and series, I don’t have much choice. There’s several movies and series in the public domain or released under Create Commons licenses, but they are limited in number. Vidcommons is one resource for such material. For the rest, I generally keep with the typical commercial movies and series. I do not know of any coop who provides commercial movies or series, so it’s a bit of a dead end there. There are some studios who do create free culture works, like the Blender Foundation and Morevna Project, so at the very least I can contribute financially to those. I also have several torrents running on my server with public domain or Creative Commons licensed work.

Sick funds can’t really be for-profits here, but the one I had, was taken over as part of a bigger group who is a for-profit. I looked around for alternatives, and eventually decided to join one of the bigger sick funds we have. It’s part of the socialist movement, with a strong focus on mutual aid, and afaik not owned by another entity. This seemed like the best bet for a sick fund who won’t get taken over by a for-profit in the future, and I was able to carry over my hospitalisation insurance without loosing coverage from know ailments. It’s not a coop, but good enough and definitely better than what I had.

For phone carrier, I found Neibo. Before joining them, I used prepaid cards, spending only about €10 every two or three months. Neibo doesn’t have that option, and the cheapest subscription is €8 per month. They are quite new and are still running at a loss, so new products wont happen unless they are sure it can bring in more customers and money on a short run. Because of this, and because the carrier I was with, was a small for-profit, I originally decided to not focus on this one for a while. Eventually, however, the smaller carrier got bought up by a big one who I don’t want anything to do with (there’s, uh, history). This new situation was not acceptable to me any more, and so, I switched to the coop.

For phone, I don’t know of any manufacturer or resellers who are a coop. Currently I have two phones. I have one of the original Ubuntu phones, the other is a Fairphone 2 with Ubuntu Touch installed. Using an existing phone, or otherwise buying a Fairphone and running a non-Google OS, are probably the best choices at the moment.

For computers, I use old hardware that otherwise would’ve been thrown away. My current laptop has an intel i5 processor and 8G RAM, running Kubuntu. My server is a similar laptop, but 4G RAM and running YunoHost. Quite frankly, even if there was a coop manufacturer or reseller, I still think it makes more sense to use old hardware who would’ve otherwise be thrown away, rather than buying new hardware. I don’t think I’d spend money on the second hand market for this, though. I have no problem using your hand-me-downs when they are still useful to me, but I’m also not gonna give you money for something you’d otherwise throw away. I also have some SBC’s. They are Olimex Lime and Olimex Lime2. Both are open source hardware bought through Neutrinet, a volunteer bases associative ISP who is a member of FFDN.

I got my internet connection from a for-profit who had a smaller market share here. Recently they got bought up by the same big corpo who bought my previous cellphone carrier. Since apparently many people are looking for a carrier+internet pack, Neibo, my current coop cellphone carrier, is considering if providing internet connections is worth the cost to get more customers. Neutrinet provide a VPN connection with fixed IPv4 and IPv6 addresses with open ports aimed at self-hosters, but does not provide internet over cable. Currently they are focusing on getting a VPS service up aimed at activists, on the longer term they may also provide internet over the cable. If I wouldn’t need too much internet, I could probably get a more expensive plan with Neibo and use my cellphone internet, but I fear it wont be enough for me. At the moment I’m waiting to see what happens with Neutrinet and Neibo, otherwise I may see if I can find another smaller for-profit.

For water, I don’t have a choice. There’s only one provider and it’s a coop owned by the municipalities and Flemish Region. Not completely the type of coop I’m looking for, but it’s something, and I don’t have a choice anyhow.

For power, I first looked at Mijn Groene Stroom, a ranking made by Greenpeace. There was one coop provider who had a perfect score and provided both gas and electricity, so I wanted to join that. Sadly, they send me an email that they were quitting as an energy provider. I eventually joined Ecopower, another coop with a perfect score, but only provides electricity, not gas. For gas, I went with the best scoring for-profit on the list. To be fair, I should probably lessen my dependency on gas, but that’s a big undertaking on it’s own and I’m not ready for that.

For domain names, I am currently checking out Domains.coop. It’s owned by ICA and NCBACLUSA, two coops who promote coops. It’s not a coop I can join, but it’s the closest to a coop registrar I could find. I don’t think they have a big market share either. I haven’t switched yet, but I made an account and unless I see too many red flags, the plan is to switch one of my domains when it expires in March. Depending on how that goes, I’ll switch the other one when that one expires. If this doesn’t go through, the backup plan is a cheap small EU-based registrar.

Fire and car insurance are somewhat more difficult, because they are part of a package deal with the bank I have my mortgage credit with. I found two coop insurance companies, Federale and PV, so if I can ever switch, those will be the ones to check out. There’s also a coop bank, NewB, who offers insurances, but they are just acting as broker for a for-profit insurance company, which makes them less interesting to me. But until I have a good solution for my mortgage, the best course of action is keeping the insurances with the bank.

My cars are always old second hand cars bought from local dealers. The garage I go to for checkups and repairments is a small family business with only a couple and their son working there. Not a coop, but also not shareholder for-profit thing. Just working class people owning their own shop. A consideration I can make, is if I really want to keep a personal car. Car sharing is an option through coop Partago or non-profit Dégage!. But that’s something I should check out only after finding a solution for my mortgage.

For mortgage credit, I see different possibilities, but switching will mostly be interesting if/when interest rates go down again. One option is to switch to NewB and see if I can do it without being dependent on other products, even if it would cost me more in monthly payments. They are just a broker, but the bank who has the actual product is at least one with a small market share, and owned in big part by the Christian labour movement. In that sense, it’s probably the most ethical choice I have, and I could even consider joining that bank directly. Depending on how much I’m willing to spend, I could also try to pay off a part of the mortgage already, or take up higher payments, so I can be liberated from this debt sooner.

This brings us to what bank I should join. I actually have two banks now, one for my mortgage, and one for all the rest. While I don’t believe in the system of share-holder owned for-profits, I do have some such shares myself. After all, I still live in this world and have to take care of myself as well (and uh, let’s pretend for a while that the Friedman doctrine makes sense :hides:). I currently own them through the bank, and I’m not expecting much better options for that, so for now I’m staying. If I switch my mortgage, however, I could switch the bulk of my banking needs to that other bank, and the one I currently mostly use could be for the few bits the other bank doesn’t provide. Another coop bank who also exists, is one mostly aimed at farmers. It’s a coop, but I consider it an example where the coop is not necessarily a good choice because of a different ethics framework.

This leaves us with the last, but probably most basic need I have, groceries. I don’t know of any coop option close to where I live. For bread I make it a point to only get bread at a local bakery and never from the supermarket. I also try to be somewhat conscious of what brands and products I buy. I could focus on buying more from smaller shops, or directly from farmers, but that’s about it. I know there are coop grocery stores in other countries, so I somewhat hope that one decides to jump over the border to here one day.

Something I haven’t mentioned, is housing. I’m lucky enough that I live in a country and time were it’s sometimes still possible to buy a house. At age 18 I got out of school and soon found an OK-paying job. It took me a lot of saving, but at age 23 I was able to get a mortgage and buy my own house. It’s one with a lot of work, but I still prefer this over renting. Another option would be coop housing. In Flanders, Woon Coop is a coop who tries to start coop housing projects. People start a housing project, the coop owns the houses or apartments, and the inhabitants are shareholders of the coop. I think this is a great model. It has the advantages of renting, but without the rent-seeking. The needs of the owner and inhabitants are the same, because they are literally the same people. If I didn’t have my own place already, a project like this is most probably the thing I would look for.

Conclusion

As with many things, making big changes takes time. Don’t rush it, just get started. I think it took me over a year before doing my first switch, and even now there’s things where I simply don’t want to focus on yet. Things are never perfect, we can only strive to do better, and that can be done one step at a time.

Notes

[1] Yes, I’m calling it “credit” and not a “loan”, because, to me, “loan” would imply someone gave money they already have, and, by the words of the Bank Of England themselves, that’s not how it works.

[2] This is a conclusion I got from a professor in a linear algebra class who wanted to show a practical model to the marketing students who were also following the class. Here I’m gonna replace the linear algebra parts with more basic maths, and I’m gonna go over things a little less strict. If you want to try things out more rigorous, feel free to do so;

Let’s say you have a for-profit company with a small market share. A company like this wants to see it’s revenue rise. One way is to attract more customers. To attract more customers, you need to provide a good service, but that’s not enough. If there are no more new potential new customers, then you can do what you want, you simply can’t attract new customers.

So let’s make a simple model. You can always loose customers and always gain them. Let’s say that the maximum number of customers is 100% market share, and at this point you have 10%. If your offering is good enough, then you can gain some new customers, say 10% of the remaining market share. But you can also loose customers who aren’t happy with your service. You can’t always make every one happy, after all. So let’s say you loose 10%. What happens now is that you gain 10% of the remaining market share, which is 9%. And loosing 10% of the 10% market share you already have, means you lost one customer. So now you have 10% market share + 10% market share - 1% market share = 19% of the market share. Nice! Let’s say that we keep this up. Now we only have 81% of the market left, so gaining 10% of that, is only 8,1% extra instead of 9%. And 10% of the 19% we had, means that we loose almost double the number of customers as before! So the bigger your market share becomes, the more difficult to attract new customers and the easier to loose existing customers in absolute numbers.

This implies that for a company with a small market share, it’s more interesting to provide good products and/or services, so they can attract new customers. It’s also important for them to be transparent in how they are better, so people can easily compare and switch to them. Meanwhile, for a company with a bigger market share, it’s more interesting to invest in keeping it’s existing customers. But you don’t need to do that by providing a good service. Even if your service is bad, if you make the cost of switching high enough, people will also stay. And now you can extract more revenue by making things more expensive for the customers, or more cheap for you, which both lead to a worse price–performance ratio for the customer. This can be achieved by being less transparent about costs, so it’s more difficult for people to compare, making them give up on the idea of switching. Or by making switching harder due to lock-in effects, which often happen under (near) monopolistic conditions.