Hi, and welcome to a very special Designing Open Democracy Podcast on a talk held in March 2020 with Antony McMullen, where he will talk about how we can go beyond just corporate social responsibilities towards a fundamentally more democratic economic and corporate structure. Given the situation around the world with the 2020 global pandemic, this talk will be a little bit different given the social distancing requirements in Australia at the time of the recording. This was organized and ran by Alexa Pandeschi, who you will be quite familiar with our first podcast episode on Trust as a Concept.

I'll definitely recommend you to check it out as well. It's a deep discussion on to the nature of trust and how it underpins a society. Anyhow, our main guest speaker Antony McMullen is a co-operative entrepreneur based in Melbourne, Australia and is an expert in co-operative development, policy and enterprises for the common good.

As co-founder of Co-operative Bonds, his consultancy specializes in offering expert advice and support to help build and grow many other co-operatives. Later in this episode, we will have a panel where we will be joined by Sean and Ayn from Earthworkers and Behive respectively. But let's start with Antony's introduction right at the point where we finally got the video conferencing feed to be stable enough for the event to officially start.

Enjoy! So, lots of people will be having a crash course of what it's like to be e-working. Yeah, yeah, we're all learning together.

Wearing my son's gamer headphones in the kind of middle lounge room of the house. And I think we've all just got these makeshift set ups. I actually prefer to work outside of home.

And one of the cooperatives I'm involved with is as a shared office space in the center of the CBD. So I love being able to have home for home. And then when I'm doing project work, going to a little cooperative space in the city, which with quite a reasonable cost because we've come together as a co-operative and separate work from home in that way.

So anyway, so I'll get back to my presentation. I think I'll probably quickly and I might gloss over a few parts because I think the conversation with people that are online and hearing from fellow panel members will be really rewarding, I think. So just what is a co-op?

It's an autonomous association. It should be doing what its members feel is the best thing for them to do. That means that it shouldn't be controlled by any government or outside entity.

It's an association of persons. Generally, that's people like you and me, but it can be, in some cases, small businesses. I did some work with a group of stonemasons and they all had their own little separate owner operated business.

They wanted to come together as a co-operative. So the businesses, little owner operated businesses were the members rather than them as actual persons like you and me. So people come together voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

So essentially, it's a democratically controlled and owned business. The three key parts of this are social good. So you're building social good in the community.

You're doing something good for yourselves as members and the border community is benefiting. There's an economic good because you're democratizing the economy. You're sharing the rewards for effort through broadening our ownership.

And lastly, there's a cultural effect where people are coming together to work together in new ways and they're building a different kind of culture and are building a culture of relationship between each other. So often when we think of democracy, we just think of the government, think of elections. But the cultural piece is actually making democracy work for you and I through these enterprises that we build and operate together.

Co-operatives have a set of ethics and values. Co-operative members should be honest and open with each other. They should care for each other and also have an eye for being socially responsible.

And co-operatives also are based on the values of self-help and self-responsibility, democracy, equality, equity and solidarity. And I often think that the two balancing co-operative values are self-responsibility. Yep, I'm going to do something about this situation.

Backed into a corner here, what are we going to do?

And solidarity, a sense of connection between the people who are part of a co-operative. There's seven co-operative principles. Concern for the community being key.

Members putting in to build the co-operative and getting out. So it's economic participation, democracy, autonomy, I mentioned, voluntary and open membership. So as long as you are able to fulfill the obligations of membership, membership is open.

Co-ops should be cooperating amongst each other and also focusing on education and development. That co-ops themselves, being a part of a co-op is a very deep learning experience because you're learning, you're not just turning up to, in the case of a worker co-op, you're not just turning up to work, actually learning about how this business works overall. So you're doing the stuff, but you're knowing how to read financial statements and other things.

That's why education and development is really important for all members so they can understand the business as a whole. So a cooperative member, according to Tim Maseroll, wears four hats. Tim Maseroll being an academic in this area from the University of Western Australia.

They can be a patron, so they can be, for example, a customer or they can be a worker. So they're getting something as part of that relationship. They're an owner, so they own this business together.

They're an investor, they're putting in time and money, and they're hoping to get some reward for themselves and for the broader community. The last hat is being a community member, having a view for the good of the community as a whole. Different types of co-ops.

There's consumer co-ops, so it might be a bookshop, so it might be a worker co-op, can be employee owned. There are also what's called secondary co-ops, where co-ops come together and join another co-op, and that can be a cooperative group. There are also broader representation, representative co-ops, and they're often called tertiary co-ops.

You can have a mix and match, and that's called a multi-stakeholder co-op, where you might have, for example, workers and consumers on the same co-op. For example, in Mondragon in Spain, the supermarket there is jointly governed by the workers in the supermarket, but also the people that shop there. So, we're bringing all this together with a co-operative business model, where people are investing in the co-op.

So, you're creating market power through that, so you can actually start to challenge some other players in the market that may be more unethical or may be ripping off consumers or workers. You're an owner, coming together to make decisions amongst each other. You're a community member, so coming together as a community of purpose.

You might be a geographic community where you want to do something about the situation in Bendigo, like Ian, or it might be a community of people with a particular interest. It might be people, you know, app developers, for example, and they could form a worker co-op. And lastly, you're a patron and the amount of surplus that's made often can reward your patronage.

So, the more you shop, you might be able to get a dividend, for example, depending on how the co-op is structured. If you're a worker, if you've been contributing a lot through your labour, rather than negotiating with an external management team, you can actually work this stuff amongst yourselves and distribute some of the surplus in an equitable way. There are also platform co-operatives, and I think this is really important in the current situation with the coronavirus.

But also more generally, this is a new part of the economy, and there are all of these sort of sharing economy businesses, whether it's Airbnb or other platforms where people offer the work and things like that, Airtasker, those sorts of businesses. But the funny thing about those businesses is they make profit from people working with each other, providing services to the community, but the actual way they're set up as businesses don't actually include the people who are sharing their assets. For example, the Uber drivers, they're driving around in their own car, but they're not actually owners of the business.

Similarly with Airbnb, but also Airbnb is starting to think about an ownership stake or an equity stake for some of their members. But co-ops just take this further and they say, well, if we're going to come together on this business, we're going to be able to actually share decision-making, share reward, and it can actually be a much better situation for those members. So for example, is Stoxi, which is a co-operative based in the US, but there are some Stoxi photographers in Australia, where stock photographers that take pictures for flyers and advertising and things like that, rather than selling their images to Getty or iStock, they decided to set up their own platform where people could choose to buy beautiful stock photography, and the amount that comes back to the photographer is very, very different.

So those companies that are set up by traditional investor owned company, that a huge amount of that profit goes back to investors. Whereas in Stoxi, the stock photographers are the investors, they're the owners, they're the patrons. This is an old-fashioned word I mentioned before, but they're actually doing the work, so they're patronizing the cooperative.

And they're also a really kind of really interesting brand in terms of they have a lot of diversity in terms of people that are taken photos of, for stock photography, they've got their own design aesthetic, and they're quite impressive in that way. When we think about co-ops, they sit between a for-profit investor owned company on the one side and a not-for-profit often charitable organisation on the other. So co-ops are owned and run to benefit members, they're democratic, they require active membership from people.

So when you join a co-op, you need to actually contribute something and you also get something back in return. Whereas often if you join an association, you might go to the AGM once in a while, but not a lot is actually required from you. Co-ops require something from members, whether it's shopping there at least a year, it might be very light to actually doing an amount of work each year or working in the cooperative if it's a work in co-op.

So there's various ways of harnessing investment into cooperatives. But essentially the thing to remember is that co-ops make money to do good stuff. They're not doing stuff to make money.

Co-ops are not exactly not for profit, although there is a version of a co-op that is very not for profit and its classes are not for profit legally. But really more accurately, they're profit minimizing. The surplus made by a cooperative is to cover costs.

So it's to allow for risk, make provisions for the future and pay back investors if there are any, whether they're internal investors as in members and you can structure things where there's external members. But it's actually about the surplus going back into the business. So an example of the stock photographers, any of that surplus is going to go back into marketing, it's going to go back into benefiting members.

There's not this huge extractive need to make lots and lots of profit to external shareholders that may or may not have anything to do with the business at all. So there are structures globally, but also locally where cooperatives come together, they join together and provide different kinds of enterprises. For example, there's a group of co-ops in the US called the Evergreen Cooperatives.

They have different cooperative businesses where there's solar, there's green city growers where there are tomatoes and veggies in hot houses and things like that. There's also a laundry service that's provided to a local hospital in Cleveland where the Evergreen cooperatives work. What that does is those businesses are able to profit share amongst the workers.

So in the example of the laundry service, those workers invest in their co-op and as that co-op becomes more profitable, the surplus is shared amongst those workers. But they're also part of a bigger ecosystem. It's about economic development in the Cleveland area.

We've got something a little bit like the Evergreen Co-op. So when Earthworker was being designed, it was very much inspired by the Evergreen model, which was also inspired by a co-operative group of co-operatives that I mentioned before, the Mondragon co-operatives in the Basque area, Spain. So there's two great co-ops.

I'm going to spend much time on this because Sean is here from Earthworker to talk about Earthworker. But there's Earthworker Energy, which is a renewable energy manufacturing business in the Trove Valley, providing dignified work and solar hot water units. And I've actually bought a solar hot water unit from Earthworker and it works really, really well.

And there's also RedGum, which is a highly innovative worker owned cleaning service. It started in February 2018. It's got gangbusters.

It's got over 50 regular clients. All the employee owners in RedGum work casually two to four days a week, and they're working to transition towards permanent part-time employment. But of course, like every business at the moment, everyone's sort of having a look and going, oh gosh, you know, cleaning business, anything in this current environment, how is that going to work?

But they've been really successful. They've also won the Employee Ownership Australia Small to Medium Enterprise Award in 2018. So the way EarthWorker is structured is each EarthWorker worker co-operative is a distributing co-operative where there's ability to profit share amongst the worker members.

EarthWorker itself has as members these worker co-operatives, is a member organisation, is based on co-operative values and principles, and it is a non-distributing co-operative. Essentially, it's a not-for-profit. So it's kind of the co-operative commonwealth of these various worker co-op, RedGun and EarthWorker Energy being the first two big ones.

Also allows for member organisations, community organisations that are member-based and democratic. Then there's Beehive, which is not only looking to transform a sharing economy in Bendigo, but is also looking to transform the economy of Australia. And dare I say it in the world?

And we've got Ian here, so I'm not going to steal any of his thunder. So, I think I was going to talk about some of the challenges with co-ops. Look, there can be challenges where people join a co-op and they just use it here and there where they're not really patronising it regularly.

So, you know, sometimes I get a better deal with a co-op or a member of, but if I can find a better deal somewhere else or I work somewhere else for a while, you know, those sorts of things can be a problem in terms of free riders. Sometimes there's conflict between members about the short-term and long-term vision. Sometimes, because there's not a share price, sometimes it's a bit difficult to find out how is this business going.

So there's a need to actually put in ways of really valuing member input in terms of how the business is going for them. So there are some challenges as well with co-ops. To establish a co-op, you just need a minimum of five people and you adopt some rules to work out how the members are going to work with each other.

You often then do a formation statement where you're talking about the financials and the prospective members, what they're getting into. You only need that for certain types of co-ops, so it's good to have anyway. Then there's a registrar of cooperatives.

Consumer Affairs Victoria is the one here, but there's similar bodies all across Australia. And there is cooperative national law with everyone but Queensland being part of this big framework, a common legal framework. In Queensland, it looks like they're kind of just about to come into cooperative national law.

Then you come together, you approve your rules and you get a.coop address. And then you can, if this has inspired you at all, you can get out there and start a co-op. And there's a great website called Get Mutual, Get Mutual.coop, which has lots of great information about investment and how to set up a cooperative.

And it's also got a rules builder where you can just get online and have a legal, legally compliant set of rules, your constitution to your cooperative. It's also lots of great organizations out there. Employee Ownership Australia, some great stuff with the Co-op, the Business Council of Co-operatives and Mutuals, the peak in Australia is fantastic.

Co-operative powers, and you, you know, if you want to switch your power from some of the big profit making companies, you can join the Co-operative Power. It's a great one. I've just done that recently.

And yeah, there's some great co-ops like Oricup as well, which is an investment co-op for organic farmers. So there's plenty of people out there. And there's also, of course, Co-operative Bonds, which I'm a member of and we help people start up co-ops.

So that's my presentation. I think I've spoken enough, hoping that we can throw over to our panel members, which is Sean and Ian, and then we can open up to some questions. Well, I think it's over to Sean and Ian now.

So perhaps Sean is a member of Earthworker Co-operative, which was mentioned briefly before in my presentation. He's a member of the Red Gum Cleaning Co-op Board, which we talked about a little bit before. He's been involved with Earthworker for six years in a range of fields.

And like all Earthworkers, he's driven by a strong belief in the importance of a collaborative economy to foster a more holistic and inclusive democracy. So over to you, Sean. All right.

Just unmuting myself. Yeah, my relevant background is I was in a community centre for a number of years, for four years that I helped run in Thornbury. It was kind of an autonomous community centre which ran all kinds of events from underage youth gigs.

We had a big library, bike workshop, meeting space, straight kitchen. I worked for a year as a coordinator at the Melbourne University Food Co-op at Melbourne Uni and began working with Earthworker about six years ago because it kind of appealed to me as a solution or a response to the climate crisis which brought together economy and environment which there's always been a big gap in for people that care about people having dignified livelihoods and also care about what we're doing to the planet. And as part of that, I'm on the one of the, as Antony mentioned, I'm a non-member director on the Red Gum Board.

Been doing that for the last two years. One of the things I'll mention about Red Gum, Antony explained a little bit of how a co-op set up. They had five people, they worked out a business plan, they made their rules, they got registered.

But the day-to-day working of Red Gum as a co-operative, I think is interesting because it can kind of explain the nuts and bolts of a co-operative rather than this broader level thing. So the initial five members were all on the board, as well as myself, lawyer, as outside representatives. So right from the start, these people who are all cleaners took board positions, people took finance positions, secretary, we've had someone be, we've had a couple of people with delegates to the unions, and those positions have swapped over over that time, so people get experience in different roles.

We try as much as we can to have the members educated about the finance side of it, so it's all clear to everyone what's going on and how the finances are working, what the co-op can do. In those two years since I've been involved, the co-op has grown from five members and probably at its peak was employing about 12 and a couple of those are just left to go and do other work. Yeah, and so Red Gum grew out of Earthworker, which actually explained a little bit about probably fits under the category of a co-op group or a multi-stakeholder cooperative, though, as with a lot of things with Earthworker, we're a bit ass-backwards when it wasn't a group of co-operatives came together to build this kind of overlaying co-operative structure.

We've kind of done it the other way around, which is an interesting way to do it. Now, our aim is to kind of build up co-operatives to help enable a just transition away from an extractive economy. And yeah, I don't have any particular experience in co-operatives or training.

I guess I'm just very interested in collaborating with other people to help meet our needs. So what that has meant with Earthworker is that as part of the project, I have done whatever I've seen fit that needed doing to make the co-op function. So that's meant everything from fundraising and crowdfunding drives, currently helping to build the website, even though that's not really my thing, helping to write policy, manning stalls, learning far too much about hot water systems.

We have the factory in Morewell, which makes hot water systems. One of the things about that, the factory in Morewell was intended to be kind of easy, intended to be a flagship project, which is in a very economically distressed area, which is also very dependent on coal fired power. So, that project is intended to demonstrate that we can have dignified well-paid jobs that contribute something to society, and they're also helping to move us away from more carbon dependent forms of life.

Yeah, one of the other, I don't have a presentation, so I'm not going to talk for too long. One of the other things I'll just say that we were talking about at the start of this meeting, because we noted that there was a bit of a boys club, two of the main founders of Red Gum, both women weren't able to be here tonight. So I'm kind of, Antony asked me here and there instead.

I just wanted to note that. And just maybe to talk, just mention a couple of the people that I've been thinking about that have really influenced my thinking around a lot of this stuff. One of them is Mule Leydemann-Ukeleys, which is a very difficult name to remember.

But if anyone wants to look up the Maintenance Art Manifesto, I highly recommend that. She is an artist whose practice revolved around helping people to see art as work and especially women's work and care work, maintenance work as work, rather than just this optional add-on. She was the artist in residence of the New York Sanitation Department from the 1970s onwards, trying to draw attention to all the work that the New York City Sanitation Department did without which the city would collapse, basically, that required society to run.

And I think we're really seeing that now with the coronavirus and the most exploited and disposable workers turn out, actually, to be some of the most important workers that we really can't do without. One of the other people that I'm thinking of is Stephanie Kelton, who is an economist in the US, who is an advisor to Bernie Sanders, involved with modern monetary theory and has written stuff about economies of care, so caring for communities, caring for people and caring for the planet. I think that's really good work.

The other person would be Thea Ria-Francos, who has this really great encapsulation of decarbonize, democratize and decommodify. That's talking about the energy systems and the way we need to transition to be able to deal with climate change. But I think that applies to the economy more generally.

Decarbonize, democratize the economy and decommodify basic needs for everybody as well. I think Ian's gone off camera, so maybe I'll, if that's correct. Alright, Ian's back.

Yeah, maybe I'll leave it there. Have you talked about other things?

I've probably got a lot more I could say, but hand over to Ian. Okay, thank you, Sean. Can everyone hear me?

Beautiful. Sorry, Sean. I had to run off camera because my son is watching Frozen in the next room, and I could hear Let It Go being broadcast through the house.

So I very quickly gave him some headphones. Thanks for organizing this, folks. I think the best way for me to explain Beehive, and we are a very proud cooperative.

It's always good to hear Antony do the Co-operative 101 and to fire up again about why cooperatives are so important. I have been in environmental education and culture change for 20 years, and started with our team at Beehive four years ago, thinking about how we could bring together the ecological and the social and the economic parts of our economy together. So Beehive is about local people, local place, and local economy, where our vision is that we own our digital sharing economy together, and we're building our first large one.

At the moment, it's called Villages. It's going to be launched at the end of August. And Villages is geographic in nature.

At the center of Beehive, people will be a member of their village in their local community with people who live within two kilometers of them. They will be able to share access to free goods and services, free stuff, free skills. They will be able to share posts and ask for things.

They will be able to direct message each other. They will be able to plan things together. They will be able to set up events together.

Beehive is a non-distributing cooperative, as Antony was talking about before. So that means if it makes a profit, it just puts that money back into the local community and into improving the platform. When you become a member of Beehive, which is starting in Bendigo, you own Beehive, you own your data, you own the platform, no one will advertise at you, no one will sell your data to anyone, and you can build community around you.

We have, it's interesting the terminology we use at Beehive, we've always talked about getting an epidemic of belonging. And I think since at the moment we've got an epidemic that's creating social isolation, you can understand what I'm talking about there. So we want to connect people together in their local place, and we want that to be at the center of their local economy.

Now that's at the very local geographic phase around your house. Around that, we're helping to enable and set up distributing cooperatives in the sharing economy in Bendigo. So the first one we're working on is car sharing.

So we're working with a group of businesses in Bendigo to set up a car sharing cooperative. It will be a member of Beehive Co-operative, and people will access cars and car sharing through their village. So when we've set up car sharing and when we've set up villages, they kind of lock in together.

So you're in your village and you've got access to all the free sharing community building in your own local community. And then at the Bendigo or the city scale, there's going to be car sharing. And it would be good to talk to Earth Worker when we get to that point about getting, you know, the possibility of getting a solar hot water manufacturing Earth Worker in Bendigo.

That's a member of the Beehive Co-operative in Bendigo. We want to do redo the economy from the ground up, starting in Bendigo to the city scale. So when you're thinking about participatory democracy, we could end up with a platform that has, I don't know, 5000, 10,000, 20,000, 30,000 members in Bendigo.

And everyone is connected with their community. They're sharing access to goods and services with their community. They've got paid sharing enterprises that are operating in their city that are enabling them to access goods and services rather than owning them.

So the plan eventually is that we'd be like an incubator locally and we could set up energy and water and food and monetary cooperatives locally that all benefit the Bendigo economy. We've got two and a half billion dollars spent by Bendigo households every year on goods and services and most of that leaves Bendigo and most of that leaves the country. So what we want to do is localise that spend and localise meaningful work and localise ownership of the economy.

And with the sharing economy, because it's an access economy rather than ownership, you should be saving money on goods and services locally too. Our idea about scale is quite simple. We want to grow the Beehive Co-operative to the size of the Bendigo economy, and then it doesn't need to grow anymore.

And we want to partner with other local places, other local towns, other local cities, who want to replicate the model and keep their spending and ownership and work local as well. So other places that want to replicate, it would be, you know, instead of scaling like a startup and taking over the world, we want Beehive to build from local place to local place, and each local place to own their own local economy. That's probably enough, I think.

I could go on and on and on about Beehive, and I have been for years, but it would be good to answer some people's questions that they might have. Thank you so much. That was great introduction.

Before we move on, I was just wondering localized, so you definitely know about localized, Ian, don't you?

Yeah. Yeah, awesome. I know that as well because that's very inspiring for me too, and I believe it's very related to what we're talking about here.

Yeah. Localized is large business or small business, and it's also not a cooperative. I know 3O well and I love what they're doing, but we're talking about peer-to-peer or cooperatives providing services to people in local communities rather than business-to-business.

But yeah, they're doing some great work at localized. In terms of creating networks, very resilient networks and communities that's related. But that's interesting angle as well, which they're not a cooperative, but these things like that could potentially use cooperative structure.

That would be my question when it gets to question and answer, possibly for Antony. So let's start with that. We had Andrew Downing.

Andrew was asking non-member directors. So Antony, do you want to answer that?

Well, I could, but Sean is actually a non-member director, so I might throw it over to him. I'm happy to talk about that as well. Sure, I'll try and talk to that.

Please correct me if I'm wrong, Antony, because my learning about what it means to be on a board and what the function of a board actually is comes from my experience with Red Gum. I haven't had any specific training in that, but my understanding of the way that the board was set up with Red Gum is that there's five member directors. So they're all worker members.

They all work in the co-op and they're all on the board. And there was two positions in our rules for non-member directors to bring both outside expertise that the co-op didn't have internally. So our first non-member director was a lawyer and myself representing Earthworker Co-operative as Red Gum was a member of the Earthworker Co-operative Network.

And because I've been with Earthworker for five years and knew a number of the people in Red Gum as a kind of out consultant, I guess I see it as like Ford has a particular responsibility, like mainly legally, their responsibility seems to rest around like kind of financial decision making, making sure that the co-op can meet all its expenses. So I'm getting, is someone, you can speak it rather than the headphones. If everyone can mute, I think that's a good idea.

Yeah, maybe muting. I'm just getting a lot of feedback of my own voice. Yeah, so I feel like I'm rambling a bit.

The member directors kind of represent the membership. And so my position on the board is not to, I don't feel it's like to contradict, it's just to bring the expertise and kind of go with whatever the membership thinks is the best decision around things. As long as it kind of, as long as we can get to a point where we can agree that it's the best position for the co-op to be in.

If you have more thoughts on that, Antony. I think you described that really well. The only thing that I just sort of add to sort of compliment what you're saying is that co-operatives are member-driven.

It's about member democracy. But a board has this broad responsibility. So sometimes there's a need to bring in someone external that has a particular expertise.

It might be law, it could be marketing, it could be any of those sorts of things. So you can bring someone on board literally to do that. And non-member directors always have to be in the minority.

So all the decisions that are made by a cooperative at the board level need to be made through member majority decision making. However, the non-member director does have a vote, just in the minority to protect and safeguard that member democracy.

Maybe we can move on to the other question unless anyone has questions about that, those answers. We have a question by Anouk and he basically said, Hi, Ayn, you've been at Beehive for a while now. What challenges has surprised you?

And if I've just lost my job and have been inspired by the cooperatives that we discussed today, what would I wish to that I wouldn't have known in two years time if I dived in setting up a cooperative here in Melbourne?

Yeah, okay, yeah. So setting up Beehive Co-operative has been quite hard. You know, you need five promoters to set up a cooperative.

And my first piece of advice would be to get together with five other fired up people, work with you on setting up your cooperative. There is a network of brilliant people around Australia who can help. And that is much more established, in my opinion, than it was five years ago when we started thinking about Beehive.

So make sure that you get help from the great people that are out there that really do understand cooperatives. There is also movements around the world that have really great people. Platform Co-operatives movement globally has given us a lot of ideas and a lot of help.

But I would actually say the more cooperatives that we have around the country, the more we are going to be able to pull our thinking in an open source kind of way and help each other local place out. So I would say talk to current cooperatives and see if you can replicate what they are doing because we have got some really, really great organizations and people out there that have already done all the hard work. So with Beehive, what we are saying is we would love to talk to other people from other places that would like to replicate our model and we would like to help them do that.

So I would say talk to people that have done a lot of hard work and see if you can replicate rather than trying to start from scratch. Capital raising has been really, really, really hard. We have done five years of hard yards there and we still don't have an answer.

What we have done to this point is raise enough capital to finish our car sharing business model, which is now looking good, and to build our central application, Villagers. So that will be launched in August. But we're still volunteer board members that are running Beehive.

We want to move to a point where we've got a highly successful cooperative that's employing lots of people. Hopefully with Villagers that we start to turn that corner. But capital raising as a cooperative is quite hard, especially when you're trying to raise capital for a digital platform that, you know, it needs capital to build that platform.

So I would say reach out and network and find good ideas. And one of the cooperative principles is that cooperatives cooperate with other cooperatives. So reach out and see what's there and look at your skill set and look at the great cooperatives that are already in existence and get in touch and say, you know, how can we replicate?

If I could just add to that, Ian, the actual the the ability for both external investors and internal member investors, it's able to be done. One of the challenges that we face, and I'd be interested to hear from participants if they have any comments about this, one of the challenges that we face is that cooperative shares operate, you know, that members have, operate differently from shares on the stock market. So they don't fluctuate in price, they're fixed value.

So when you leave, you know, it can be a bit of a delay, but generally when you leave the co-op, you get your money back from your shares. There's also this thing called cooperative capital units, where external investors who aren't members, you don't have control in terms of how much money they put into the cooperative, but they like the cooperative, they think it's got a good business plan, it's going to be viable, and there's a social return on this co-op going well, and there's also going to be a financial return. That's there as well, but the problem we have is that no one's heard of a cooperative capital unit.

Those that have heard of it are a bit scared of it because it sounds different. Also, it does turn off some investors because some investors are very concerned about having control. There's some challenges.

I reckon we can get the investment from the community. In some ways, it's about actually communicating that value in a way that's going to be effective. That nut's yet to be cracked, I reckon.

I'll just add to that, too, Antony, that we will find that out very quickly once we have our villagers' platform and we haven't was on board, because at the moment, we've got this gap where people aren't going to invest in something they can't see and touch and hold. So hopefully, we'll have a bit of an answer from at least Indigo from August onwards about people seeing the value of being involved in co-op and then and seeing whether they'll invest further in that cooperative thing. Thank you.

So that was the question to the challenges that Anukh brought up, and we had everyone talking about it. Apparently, it's an actual big challenge. I also want to point out that we will collect the links and resources and references and send it to everyone who signed up through different channels.

We've got Meetup. If you haven't signed up, I'll put the link here, just RSVP, so we can actually send you an email. If you can't do that, you may not be able to.

I'll put the email to the website, so you can shoot an email so we include you when we send that information regarding the challenges. Two people brought up the question about job losses. Nick, one of the organizers of this group, by the way, he asked, how do cooperatives deal with job losses?

This is something that I've been very interested as well. How can we help as disruption is happening, and workforce find a new place and address?

Yeah, so that would make it very related as Brian is mentioning. Also, Anouk put it very delicately. I read out what Anouk has put again, so for the whole panel, if they have an answer.

Anouk says, if I've just lost my job and have been inspired by this discussion today, what would I wish I'd known in two years time if I dive into setting up a cooperative here in Melbourne?

That's very interesting. Or maybe how can someone discover if there's probably people who are thinking like this?

How can you discover?

So that's something that I'm adding to the whole mix. Who wants to speak first?

What was the last part of that question?

I think Sean was just asking, Alexar. All right, maybe I just want to say something about the question of what would you wish you'd known in two years?

And this is partly triggered by Ian saying something about the model of Silicon Valley and startups, which that phrase of move fast and break things, that I think if you're thinking like a cooperative, ideally, and in this current moment, is move slow and repair things. And by move slowly, I don't mean, I mean kind of in a systematic way. Like you've got to think long term.

You're going to want to be doing work all the time towards the cooperative if you're trying to set up. I also think the other thing to think about is like what's your niche?

What niche can you fill?

Because that's really important. You've got to have a business case for it because we're operating in a capitalist system. And if you're trying to compete at that level, you're just going to get crushed.

And lastly, it's all about the people. You've got to have good people. It's absolutely core if the people that you're working with aren't committed to a project, aren't committed to each other and the relationships are going to collapse.

One thing that I'd say is adding to what you're saying, Sean, is that where are the needs?

And in particular, in this time of crisis, there will be plenty of needs. And one thing a co-operative can do is it can get going, it can get members support from people that can, like crowdfunding, you're not looking for one big huge investor. You're looking for lots and lots of small investments and opportunities.

We're probably heading towards a recession, possibly even a depression. I hate to think that, but we're certainly heading towards a recession because of what has happened with climate change, what's happened with the bushfires. And then secondly, the whole economy is being, is growing to a sort of a standstill.

A standstill, is that the right word?

So there'll be plenty of opportunities for communities to come together and go, let's work with what we've got. I mentioned Mondragon, the area of the Basque region of Spain. And that cooperative is a massive, that group of cooperatives is quite a massive for its population.

About 70,000 employees. It's the seventh largest company type group in Spain. The scale is really, really high.

They started directly after the Spanish Civil War, where there was absolute devastation. And they had nothing. So they started with education.

Education is really important for cooperatives. So actually learning about cooperatives, learning about how to work with each other. So starting with education is probably a good place to start.

Then they found a product that lots and lots of people wanted. It was a particular kind of heater at the time. That started to sell like gangbusters.

So they knew how to make that stuff. And they started making and selling. And then they started to think about, in a way, an ecosystem of cooperation.

So that whole area is a, you know, there's a cooperative university, there's cooperative finance like the credit unions, there is the worker owned and consumer owned cooperatives there. So when the global financial crisis hit, when one of those big worker cooperatives went under because of the pressure of what was happening globally, there was enough resources within the ecosystem of Mondragon to allow those workers a living wage for a significant period of time from the cooperative community's own resources and to redeploy most of those worker owners into other parts of Mondragon. So the networking effect that what Earthworker is trying to achieve, with cooperatives cooperating together, worker cooperatives under the big Earthworker banner and what Beehive is trying to achieve with having lots of cooperatives that join Beehive is really essential because what you're getting a market share, but you're also protect each other if and when things go wrong.

So a piece of advice just lastly would be have a look at what exists out there now. Earthworker is there now, Beehive is there now, find out what they're doing, learn from them and then maybe be part of them or build something that's complementary to what those other cooperatives are doing. I would also say there's a lot of great cooperatives overseas that aren't necessarily represented in Australia, but it's worth looking at.

There's cooperatives in every every kind of sector you can imagine. I can just think about the US, there's bakeries, there's organic grocery stores, window makers. There's just a whole lot of stuff that we don't necessarily see on the ground here.

So I think it's also worth looking outside of Australia just to see the possibilities and how those other models exist, but also a lot of good resources here if you look. Thank you. So this has been a great conversation so far.

So there was a question that I had, if it's related to this conversation, please panel decide. I've heard of a second tier cooperatives, which I understand it's been cooperatives make a cooperative themselves, but that's as far as I know, I may even be wrong on that. If that's something that is related to our conversation, please, that would be good if you expand on it.

Well, both Beehive and Earthworker, Earthworker Cooperative and Beehive are designed as second tier kind of cooperatives where cooperatives can join them. They're both, well, particularly with Earthworker, it's a multi-stakeholder co-op, so other people, people and co-ops can join Earthworker. So both of them are designed in that way.

Interesting. So the second tier doesn't imply that in that tier, only cooperatives can join. So in the same flat level, there are individual members and a cooperative member.

You can have a second tier or a secondary cooperative that is a multi-stakeholder cooperative, so it has different types of members. If it is just a cooperative of other cooperatives, that's technically what's called a cooperative group. And it only takes two cooperatives to form a new cooperative, which is a cooperative group.

Why you would do that is that you can share resources, you can market together, you can figure out financial systems. So you're building infrastructure. The secondary cooperative is building infrastructure and support for the primary cooperatives, which are front facing and very focused on their businesses.

Thank you, Anthony. So this was, I believe this answered the other question that I wanted to ask when it was Ian mentioned about localized. And I thought if there is any business that wants to act as a network weaver, if you know what I mean, certain networks, they want to kind of facilitate transactions or connections to flow between different networks.

It seems to me that cooperative is a really good structure for that. Are there alternatives?

Is that right assumption?

Are there alternatives to that?

And is there some examples of this particular case when to connect different businesses and cooperatives comes in and connects different industries together or different, basically, you mentioned, geographic locations together. But you might have mentioned, I may have missed, but I'll leave it to you. Okay, so I can have a go at that one for starters anyway.

So the way the WebEHUB is going to look at networks, so every member will have their own identity and their own reputation. That starts in their geographic village. But that reputation and identity will then go out through the sharing enterprises and back.

So everyone will have one identity and one reputation in their town. And that will network through all the different cooperatives and back again. So we're looking at setting up a, it's kind of a network that links all the cooperatives together.

All the cooperatives that use that reputation and identity will be members of the Beehive Cooperative in Bendigo. So that's creating a network of cooperatives around. And that's really what Antony was talking about with Mondragon in Spain, that you have a network of cooperatives locally and can help with employment and can share funds around and look after each other.

We're aiming to be like a local incubator for cooperatives in Bendigo. But then we want to partner, as I said, with others in other places who want to do the same thing. And there are brilliant ideas out there, across the world in cooperatives that we would love to partner with and create networks.

Our kind of idea is that we have open source ideas and networking between cooperatives. So if one cooperative in one place has an idea, they just share it with all the other cooperatives in all the other local places, open source. And that's a way that we can really spread ideas quickly, nationally, globally.

Did that answer your question, Alexar?

It did, actually. I was wondering if there is any question. And the question was right in front of us, like on the panel.

That was amazing. And that was a beautiful architecture. I enjoyed listening to the way you described the concept, because you're involving identity and reputation as well.

And very, very important, especially if you get it right, fundamentally, it just kind of explodes. Because these are two areas where there hasn't been a good design, my experience so far. So we have another question from Nick.

Unless someone else wants, on the panel or in the audience, wants to add to that. Great. So yeah, my question was, is there a form of legal liability, or like limited liability corporation, such that if they do get sued or become bankrupt, that the people's personal savings are sort of protected?

Like the design of the corporation, one of the great technologies that enabled our society to function the way it does for better and for worse is the invention of the limited liability corporation. Is that a similar sort of scenario for cooperatives?

Simple answer to that one is yes. So there have been models historically of business partnerships where there is liability to individuals, where if something terrible happened, you lose the house. Now, all of the same limited liability protections, if you can talk about it in that way, are available to cooperatives.

However, the cooperative law does have a lot of crossover with some of the obligations that a large corporation would have.

So if people do the wrong thing, if they're directors, for example, they can certainly be liable, just like any other director of any kind of company. If you're owing some money to the cooperative, then if it gets wound up, you might be liable to pay back the difference if you're still owing money on shares or something like that. But otherwise, it's all those benefits, and you refer to it as technology, that's all available within the cooperative form.

Yeah. Very, very similar. Yeah.

Sure. Thanks for that. Can I just ask a follow-up question of I'm sorry, I came in late, so you might have dealt with this.

I do apologize. Just because we're a democracy group, I'm wondering what the decision-making process is at the board level, or is that where most of the decisions are made?

When I asked this question about job losses, that's one of the questions I was thinking about, who decides that in the co-operative and what's their decision-making process?

There is a board that's elected by members. There are majority members, so they represent the members. There is ability to have a general meeting where all members can come together.

Depending on how you're structured, you could certainly do that electronically. For a really big decision, you would generally get all the members together. There are certain decisions that require all the members, not just majority, but over 75% in some cases, for some really big decisions that the cooperative is making.

So it is biased towards democracy, but it does also allow a board to get on and govern. But with big decisions, it's generally got to get in all the members together. Okay, sure.

Okay, that makes sense. Thank you. Thank you so much.

Conscious of time. We've got 10 minutes and unless there is any burning question, I want to put out SIP. So the question is, can Co-ops raise capital from early stage backers by issuing credit for future product services?

I'm hearing similar to what Kickstarter is doing. Will the usual securities laws, which a lot of blockchain products have also been struggling with that in terms of regulation. So anyone want to address that question, which is quite technical?

There are a lot of similarities, but just in terms of securities and investment, this is a technical sort of area and so it's always an area we should get advice and dig pretty deep. But in general, just something that I think would be of interest to people, if members join a cooperative and they are investing themselves in the cooperative, it can be at an early stage. A lot of the regulatory burden that you would get with a regular company is lessened.

Because the principle is if you're a member and you're able to vote, you're a part of this thing and you're wanting to invest. There are still things like disclosure statements. So the cooperative needs to provide really openly and transparently what the offer is, should go into all of the risks.

So it's certainly about making sure those sorts of things are in place. But it's actually a form of enterprise that marries up quite well to a crowdfunding type of ethos, because you all own it together, you're all investing in it together. The one difficult part is when a worker cooperative might have 10 workers, and they may not have enough money to really invest in it.

But there is an option to get external investment, the threshold and the things that you need to do to get that external investment is higher, for the same reasons that are in place for other kinds of companies. So, yeah, it's very nuanced. It's very horses for courses, but I've just tried to answer that generally.

So as to kind of highlight, there are some greater opportunities with co-op, once people get their heads around it, in terms of harnessing that kind of investment. But Ian and Sean might have other comments about that as well. I've been in touch a bit with Kevin Cox from Pre-Pay Solar.

So the question included, can people pre-pay for services as like an investment?

So there is an organization based out of Sydney, Kevin Cox is behind it, and they're looking at getting people to pre-pay for solar power up front, and using that kind of investment, it doesn't kind of interfere with cooperative shares or anything. People are just pre-paying for products. So cooperatives can certainly do that.

Thanks. It's really helpful. So did we have someone wanting to ask a question?

Okay. Sid says, thanks. That's good acknowledgement.

Thank you, Sid. I think I had someone wanting to ask. So if that was the case, feel free to continue speaking.

I start basically, the very quick round around the house. I'm personally thinking of consumers, cooperatives for like very, very small, organic consumer cooperative for the panic buying situation. And it's not just panic buying, but also very soon, I believe, we need to know exactly how we're distributing the resources.

So I think cooperative structure looks like a good model. That's where my head is at. If anyone's got suggestion, wants to work on it, play it on, Brandon Strong, I'd like to hear.

Can I just say, Alexar, that if the last few weeks has taught us anything, it's that casual workers, you know, the extractive for-profit economy, are all two or three weeks away from poverty. And directors of large corporations are three months away from bankruptcy. I mean, the global economy is a house of cards.

And we don't have a cooperative network in Australia, we are strong enough to be able to support people through a time like this moment. But we do have a lot of people working on start-up cooperatives. You know, Beehive is going to be live in August.

Earthwork is already there. There's like a whole new movement of 21st century cooperatives that are forming right now that will really, really help with providing money for work, localising ownership, localising spending, getting spending circulating rather than it being extractive. And it mightn't help us in this moment right now because we're all starting, but hopefully down the track it'll provide a real buffer to the kind of shocks that we're seeing.

And we're seeing a pandemic, but we've got coming economic shocks around climate and around biodiversity and around just the nature of the extractive economy itself. We need a new system. I think there's a lot of people in the cooperatives movement that are working really hard on creating that new economy.

So I just wanted to say it, you know, there's a I've probably had 40 emails and phone calls this week from people saying, be hive ready, be hive ready, we need to stop people buying toilet paper and everyone needs to connect with neighbors and we need to do this right now. And I keep saying, look, it's people are panicked right now. You know, there's all sorts of wonderful people working on wonderful solutions, but there's a whole movement that is coming, the cooperatives movement.

It's not quite big enough in Australia to make the impact that it will make in the future. Okay. Thank you very much.

Some of the things that what you're talking about popped into my mind was about, however, I remember there was GameStop employers essentially being forced by GameStop to still serve even in amidst a, well, essentially a lockdown.

Basically, have you heard about this story?

No. Well, in America, there's a big coronavirus epidemic going on, and I think today, they actually exceeded Italy. Andrew, would you like to jump in?

Oh, Andrew, me?

Yes. Hello. Yeah.

I don't know how well this whole thing would get received or what I wanted to say, but I noticed a bunch of odd sort of one. Firstly, I would get to get this across that I'm very much a systems thinker, and I look at this whole discussion in terms of a bunch of very interacting systems and what things would work and why. And so some strange observations about contradictions I see in all this.

I get a very sort of, let's call it anti-capitalist vibe to the whole movement, which is, I don't know why, but then I hear people having trouble raising capital. Contradiction right there. Yeah, I hear anti-amphitizing messages and everybody goes, yeah, but you're just trying to spread a message and you don't want to advertise?

It seems like there's a focus on this being cooperatives versus capitalism instead of actually looking for a way to have more like a cooperative, augmented capitalism. You already have capitalism. There's all sorts of places where it breaks around the outsides, and every one of those is an opportunity for cooperation, where you could really make a difference there.

I mean, just some wild examples that stand out to me just from very recent times, as the economy gets worse and we get more focused, more centralized, dominant markets and things like, say, retail, you got Coles and Woolworths versus everybody, and they crush the farmers. Wow. Okay.

Hang on. Look, there's an opportunity. Some of the best cooperatives that ever existed, as far as I can see, the most stable ones, the ones that always managed to somehow get capital, are ones where there's existing businesses, particularly small businesses that can find a way to cooperate with each other, to create a new market and off they go.

They're doing a cooperative thing. If you create a cooperative set of consumers to work with them as well, then you've got an opportunity, right?

But it stems out the side of capitalism, not in contradiction or on competition with it. Yet the vibe that I keep hearing is the opposite of that. I heard people say things like, what was it, was a phrase like that.

They didn't like the move fast and break things when it moves slow and I think the thing is that. The whole move fast and break things, that whole saying is about you've got to actually make mistakes to learn. That's the point of it.

So it's got to ask like, move fast and try things, because that's the point, that's the message is to fix things and you actually have to learn by doing and you break some things, right?

That's why that message existed. And there's this other thing, early on, one of the key issues that was mentioned as a difficulty in creating cooperatives was this issue about people worry about freeloaders, right?

And you understand why that would be. The concept of freeloaders in cooperative environments is a trust issue and essentially comes down to the whole people fear the tragedy of the common standard game theory problem, right?

That's because people always fear loss more than potential gain. So they don't want to lose what they have. They fear the loss much more than they sort of see the potential for game, which is why everybody is very tentative about moving into these things.

And so you always want to be following this funny principle as a user interaction design thing, the principle of commensurate returns. This is the sort of idea that when you introduce somebody to a thing, you want to give a smooth ramp into it. So what you want is that somebody, anybody who is new to these things, you want to arrange that their first experience of it is that they put very little emotional energy in and they get some positive gain out of it.

I got to buy something cheaper. Oh, that was great. Wow.

Okay. Maybe I'll invest more interest in this, right?

That sort of idea. So and then when they invest more energy into it, and then you can ramp it up. So you want to always have a nice smooth curve where each time they put in, they get something better out of it.

And it turns out to be easy each time, because that's the only way through the sort of the thicket of this fear that really hard times and so it makes it hard for them to engage. So yeah, I look at this whole thing and I go like, there's too much to mean. It seems like separation between the what's out there and falling apart, that we could be leveraging versus trying to make things separate.

Maybe I'm rambling too much. I'm not sure whether anybody gets what I'm trying to say here. I think there's a lot more potential here in sort of cooperation around, particularly around the falling apart parts of capitalism, where anybody who's on the outer of that who's being squeezed out by monopolistic behaviors is usually somebody who has something to lose that could actually benefit by cooperation, right?

Those are the people you should be creaming up with this. Thank you very much. As I understand, with any crisis, there's opportunity.

And the coronavirus epidemic, the bushfire and many crises, what they do is they help bring to light certain structural flaws in society that ultimately by overcoming these problems, we become stronger as a society. Is that what I understand from talking to you?

If I could just respond as briefly as possible. Within the cooperative movement, there is certainly a diversity of people that in some ways be described as socialists or others that would be described as being more conservative. When we're looking at, for example, rural communities, the National Party in Australia is very, very supportive of cooperatives.

We're also getting lots of interest from the union movement in the building of cooperatives. Certainly, there's always been a tension. This tension is in the social enterprise movement, but it was also historically been a tension within the cooperative movement.

That if the market is what's normal, then cooperatives can come in and deal where there are market failures, where something's gone wrong, but the market as it's set up is fine, but there's going to be a failure, so the co-op comes in to fix those problems. And that has historically worked quite well. It's been a tension between that and people that believe in a broader, more transformative movement.

It used to be called the cooperative commonwealth. So you've kind of got this idea where perhaps one day, most of our economy will be democratic and participatory. But you know what, a lot of those people with those different perspectives still work together in the cooperative movement for the common good.

But I don't think we're able, personally, I wouldn't be able to resolve that tension there. I think it's not only present in the cooperative movement, that tension between and views about capitalism are present in lots of other areas in economic life. And I think when we're heading towards this sort of crisis where we're talking about things like stopping evictions and those kinds of measures, the whole system is under stress at the moment.

So I guess we need to be thinking about what kind of economy that would like in the future. Thanks for reaching to this end of the discussion, where Alexis thanked everybody and all the contributors for contributing to this free flowing kind of discussion, which he quite liked because it allows for hearing different kinds of opinions and answer. And it's also how we all would learn the general structure of how Designing Open Democracy as an organization will function this year is we'd be aiming to have a talk on one month and then an offline discussion on the other month.

And we think this is quite valuable, as in it would allow everybody to have the ability to learn a new concept, then synthesize it and see how we'll apply in their own context, which for our organization will be how do you apply, say, co-operatives in the Australian context. And I hope you'll be able to have a workshop in your country as well, where you can explore these kinds of concepts as well. You can also join our online discussion at discuss.designingopendemocracy.com And if you would like to contribute to any of our future talk or give us a tip, then you could also email us at contact at designingopendemocracy.com I hope you enjoyed all our talk so far.

And if you haven't, definitely check out our latest episode with Nicholas Grone from Lateral Economics where we talked and discussed about the concept of citizen juries as well. So thank you for spending your time to listen to this episode and I hope you learned something new. See you on the next episode.