business models

While it may be tempting to divide the world into two separate camps, market and commons, some of the most interesting territory lies in the spaces in between – namely, in the non-capitalist, commons-based marketplace.  In France, they call it the “social economy” – the segment of commerce serviced by cooperatives and mutual enterprises.  Such companies meet their members’ commercial needs while also trying to address broader social, ecological and democratic concerns.

I spent the past three days at a gathering, the Mont Blanc Meetings (Les Rencontres du Mont-Blanc) dedicated to exploring how economic efficiency and social equity can be balanced through coops, and how the social economy can be a political force for a new vision of society.  The Mont Blanc Meetings have been held every two years since 2005 as a kind of alternative to both Davos (World Economic Forum) and Porto Allegre (World Social Forum).  The Mont Blanc Meetings are the social economy’s attempt to build an international identity, collaborate on practical projects and promote a new political vision. 

I must say, the organizers certainly chose a lovely place to meet – Chamonix, France, a small resort village nestled in the shadow of two majestic mountain ranges that tower more than two miles above the 3,000-foot valley floor.  What a combination:  European charm, good food, scenic beauty and bracing political discussion.

In the latest American Prospect, Harold Meyerson tells a good morality tale about how certain types of businesses can succeed only if managed as public trusts, if only in spirit.  He documents the ignominious decline of the Los Angeles Times and the Los Angeles Dodgers after each was taken over by men "so venal, cynical, incompetent, and egomaniacal that they gutted them in just a couple of years.”  Both Sam Zell (who acquired the Times after buying the Tribune Company) and Frank McCourt (a Boston parking lot mogul) treated the revered corporate institutions that they bought as personal piggybanks.  The public was a mere afterthought -- helpless dependents on seemingly impregnable monopolies.

While the idea of running one’s business as a public trust has historically gotten a lot of lip service, at least in the newspaper business, today the barbarians who pass as CEOs and investors virtually go out of their way to flaunt their coarse, selfish personalities.  The schadenfreude at the fall of Zell and McCourt is therefore deeply satisfying.  Writes Meyerson:

Zell installed talk-radio executives who knew nothing about newspapers. He derided the editorial staff at the Timesand the Tribfor not producing the kind of copy that would turn the industry's fortunes around, and made clear that editors and reporters concerned with editorial autonomy and quality journalism were elitists who were no longer to be indulged. He instituted layoff after layoff, so that the Times, which had had an editorial staff of 1,200 in 2000, saw its ranks reduced to roughly 500 today. A little more than a year after his purchase, with the recession clobbering revenues and Zell's executives still clueless about how to run a newspaper, Tribune entered bankruptcy proceedings, where it remains mired to this day.

The debate over the commons used to focus on how to protect shared resources from private predators.  Now, increasingly, the focus is shifting to how the commons and market forces can constructively work together while preserving the integrity of the commons.  That is to say, the focus is on how to preserve the social relationships and free flows of information that constitute the commons while permitting some sort of monetization and/or developing external revenue sources. 

I consider this whole conversation is a significant “developmental stage” in the evolution of the commons:  how to develop a sustainable balance between commons and markets?  This sort of talk was much in evidence at the Free Culture Forum in Barcelona in late October; at the International Commons Conference in Berlin on November 1-2; and most notably at the “Economies of the Commons” conference hosted by the De Balie Center in Amsterdam on November 11-13.  The tagline for the latter conference put it well:  “Paying the cost of making things free.”