Professor Nathan Schneider on Platform Cooperativism

Intro [00:00:07] You're listening to POWER PLAYS, the podcast hosting conversations between policymakers, engineers, business leaders and others who are influencing the Internet's infrastructure and institutions in ways that impact all of us today. Here's your host, Ayden Férdeline.

Ayden Férdeline [00:00:29] Welcome to POWER PLAYS, presented by Grant for the Web, I'm Ayden Férdeline. Today on the show, we have Nathan Schneider, an assistant professor at the University of Colorado Boulder, where we're going to discuss his pioneering work on platform cooperatism. He is the author of numerous books. His most recent was "Everything for Everyone: The Radical Tradition That Is Shaping the Next Economy". But my personal favorite was "Thank You, Anarchy: Notes from the Occupy Apocalypse." Professor Schneider, a very warm welcome today to POWER PLAYS.

Nathan Schneider [00:01:01] Very glad to be here.

Ayden Férdeline [00:01:02] Now a question that I always ask guests on POWER PLAYS is an ice breaker, and that is, what is a contrarian thought about business or culture that you have that others might disagree with you on?

Nathan Schneider [00:01:15] It's very common for people to try to eliminate friction in their organizations, things that slow things down, and that might cause something to go more slowly, more deliberately. And I think friction very properly applied, can be a really powerful and good thing. Another thing that people might assume is that democracy causes friction, that including lots of people in appropriate ways, will increase the slowness, the friction, dragging on your organization. And I don't think that's true either. I think, again, properly applied friction can be really, really valuable and properly applied democracy doesn't necessarily lead to friction. It can actually make things more efficient.

Ayden Férdeline [00:02:04] That is a good segway for our discussion today, which is going to be on how online communities are governed and in particular, why we need to govern these communities in different ways. But before we get to that, can you introduce our listeners to the kinds of topics that you research and how you found yourself entering academia?  

Nathan Schneider [00:02:24] Sure. Well, it depends how far one wants to go back. About 10 years ago, I was working as a reporter and I was covering mainly protest movements, not business. I did a book about Occupy Wall Street called "Thank You Anarchy". And there I saw a generation of people just really, really fascinated by and exploring ways of deepening democracy in their everyday lives. That was really at the heart of that movement. Then a lot of those people then started getting interested in the cooperative business tradition, a tradition of businesses owned and governed by the people who rely on them the most, whether their employees or customers or whatever their and and I got drawn into that as well, kind of following them and got involved in helping to build this idea of platform cooperativism, bringing that tradition of cooperative business into the online economy, helping to address some of the deep problems that we see there. And that work, too, made me start to recognize that as we were building these cooperative platforms and technologies, it just became clearer and clearer to me how a lot of our technology is not built for democracy. The tools that we use to manage our social lives online, our work lives, our political lives, don't have a lot of democracy built in. They're built with this idea that I call it implicit feudalism where admins and mods can have kind of infinite control over the spaces that they govern. And this really, looking back on the aspirations of those protesters at Occupy Wall Street or looking back on the long tradition of cooperative business and people trying to do democracy in their economic lives, made me realize that we need to really take a closer look at how we are structuring our online spaces and to explore ways of building more participation, more deep accountability into how our online spaces are designed and how they operate.  

Ayden Férdeline [00:04:36] Implicit feudalism. Let's dive into this concept a bit. Who do you think is responsible for making platforms more democratic, particularly if we're talking about online communities that are privately held and already exist? If a user of one of these platforms, for example, recognizes that there is a democratic deficit, what can they really do about it?  

Nathan Schneider [00:04:58] Well, I guess they could answer just by by pointing out what's going on now. On the one hand, you have like, really establishment platforms like Facebook struggling with this recognition that we need to distribute accountability and authority for big decisions that we're making. And in some ways, the Facebook Oversight Board that that the company has just put into existence is is a step in that direction. And if yo read with the things that Mark Zuckerberg has been writing over the last few years, it's clear that he's trying to figure out on the one hand how to retain a lot of his kind of economic power and kind of vision power over the organization, while trying to also disseminate some of the accountability and decision making outside of his own role and even outside of the company itself. So you start to see Airbnb, for instance, also just created an advisory board designed to be ultimately elected by hosts on the platform that would help guide decisions of the company. So you see these big companies that are really designed for feudalism, trying to figure out how to solve some of their biggest problems through more distributed accountability. And you see kind of in a lot of ways how bad they are at it because they're so they're so path dependent. But among some of the newer platforms, you see a different kind of approach. Take, for instance, to take a controversial case, Parler, which has become best known as a kind of haven for right wing activists and so forth and its involvement in the January 6th uprising in the United States. But one thing that Parler does that hasn't been widely discussed is, is it has a jury system that picks random users to help make moderation decisions. Now, the decisions are based on very minimal policies. So that's an issue. But still, it's built up from the ground up with this idea that users are going to participate in important decisions about what happens on the platform and particularly in the kind of emerging distributed Web or or Web 3.0 space. If you look at blockchain technology, as well as other kinds of distributed technologies where people are trying to build alternatives to the big corporate platforms, you see a lot of experimentation in different kinds of participatory approaches. I think with that recognition that either we're going to give one company lots and lots of power. That's where that road leads, or we have to be much more intentional about how we create participation and power in online space. So from what I see, this recognition is growing among the practitioners anyway, what I think we missed is a kind of bigger picture story about where we're going together, what we're recognizing here together, and how we can be much more careful and invest more in how we create those spaces well. How we create, in many senses, the new social contract of online life.

Ayden Férdeline [00:08:28] I find the example of Parler really interesting, it was trying to uphold some community standards that had a very maximalist interpretation of what is free and lawful expression, and it was allowing ordinary users to serve on a jury to decide what content could or could not remain. But does this approach work and does it scale? Not everyone in the world lives in a democracy, however, even if everyone did, will this lead to good outcomes or would it just be a case of majorities ruling in a certain way, perhaps at the expense of minorities, or is it just an aspirational concept that one day maybe this will all work and lead to sound decisions being made in ways that were all really happy with?  

Nathan Schneider [00:09:14] Yeah, well, a lot of great questions embedded in that, right? I mean, on the one hand, you know, what are we asking of people? That's in some ways like a root question that we might neglect to ask when we're thinking about large scale policies and so forth. And I think that's a really important question, because we don't want to live our lives where we're constantly involved politically and making decisions about every little digital space or whatever space we touch. And so, you know, the goal here is definitely to not have to worry about this stuff very much. Right. To not to have systems that run in the background and that aren't consuming our attention and our anxieties all the time. And and I think democracies, when they're appropriately designed, when you can delegate authority to people that you more or less trust, when there are checks and balances that can give you a sense that you know, that nobody can get too powerful, then you can spend most of your life focused on other stuff. And that's good. We want to design for that. We want to design for, you know, for honestly, like a lot of passive democracy. But the challenge I think is, is what do you do when big decisions have to be made? And if you look at the context that we're seeing in this, it's been called a Splinternet that's emerging now where different countries are imposing different policies on different platforms. I think this is an outgrowth of the centralized power that these companies have developed and acquired, is that they are a single point of failure where a country can say, hey, look, we're going to arrest your executives unless you do this. And they're forced to comply because otherwise they'll lose the market. It's a result of the highly centralized structure they've adopted. Whereas if you look at some of the things developing in the more decentralized technologies, the answer, honestly, would be like we can't control the system. It is in the control of the participants. We are not the ultimate arbiter. So your national policy cannot impose, cannot tell us what to do, because even if you do, we can't implement it. We don't control the system, our users do. And that kind of design approach, I think, can be more censorship resistant, more resistant to the kind of thumb of increasingly authoritarian regimes we're seeing around the world. And that's, I think, precisely why a lot of, there's a new renaissance right now going on in explorations of rethinking online social social spaces. In terms of, is this going to work? Did Parler work? I mean, there are lots of pieces to that question. I think it depends on what you're aiming for. But I think in a lot of ways, you know, the problem with Parler was not the the jury system. It was the particular political moment combined with its approach to the rules, to what you called the maximalist free speech. But it's a reminder that there is no one mechanism that's going to solve all these problems for us. We need multiple overlapping mechanisms. And, for instance, the Facebook Oversight Board could be the image of like a Supreme Court type system. But a Supreme Court shouldn't be the sole governor of a community. A Supreme Court sits in balance with executive functions and legislative functions and other kinds of functions that are in play in the system. And one thing I think we're seeing in just the last few years in, for instance, blockchain governance experiments, is that rather than people searching, as they were just a couple of years ago, for like the one perfect governance algorithm that's going to solve governance for us, like one perfect form of voting. Instead, what you're seeing is people developing countervailing structures. So they're recognizing that governance kind of has to be complex and it always will be, especially for very complex systems. And that in order to create appropriate democracy, we need multiple mechanisms and multiple moving parts. So I think we just have to recognize, especially when you compare where we are, up against, like, anything from a large developed political system to like, you know, I think often of my mother's garden club, which has its own bylaws that are more sophisticated than any ruleset I've seen in any online community I've been part of. And so, in a lot of ways, I think we have to be humble about where we are and how much more room there is to to develop our our techniques and practices and tools for democratic spaces.

Ayden Férdeline [00:14:35] I'm curious if you think we are being, and when I say 'we' here, I mean existing platforms, if existing platforms are being imaginative enough in thinking about how they make important decisions that impact their uses. If I look at the models you've highlighted, we have the Facebook Oversight Board model, a small group of elites, top down imposition of the interpretation of the rules. There's the Parler model, very participatory and bottom up. It feels to me more like an extension of enlightenment and Jeffersonian democratic principles, that the exercise of political power is only legitimate when done with the consent of the governed, because it is so participatory. Have you seen other models or hybrids that are more creative about delegating responsibilities or decision-making power to platform users?

Nathan Schneider [00:15:25] Absolutely. And again, I really think we're in the earliest days in this step, and this is a question that we've really neglected. And in some of my research, I tell the whole history of why we've accepted this idea of kind of feudal defaults in our tools. And it's only recently really starting to change in a large way. There were certainly early experiments. But one reason why I've been really interested in the blockchain world over the years is not so much like the price of Bitcoin, but the fact that it's a space, particularly in the circles around Etherium, where people are doing a lot of really creative experimentation and trying lots and lots of new stuff. There are just all kinds of terms out there now that people are developing around - civil resistance or optimistic governance or on chain or off chain governance or proof of work, proof of stake, all these new ideas are entering the governance vocabulary slowly through this world. And to me, they're just a sign of how much more there is to explore. What I'm really interested in is, how can we create a real kind of Cambrian explosion of governance possibilities where we recognize that, first of all, that we have some catching up to do to reach the level of democracy that offline associations have been practicing for a long time, like the kinds of stuff that Alexis de Tocqueville saw when he was visiting the United States in the early 19th century and saw this rich associational life where people were coming together in these associations as being the kind of root of the political democracy that was developing very partial, very incomplete at that time. And today, I think we need to attend to those spaces as well. When we look at the ascent of authoritarian politics and the growing sensation that democracy is failing at a large scale political level, I think we need to not just look at those political institutions, but also ask where are the spaces that we're spending most of our lives in? Are we able to practice and experience democracy in those spaces as well? Because the two are connected. And as soon as the opportunity opens, like in the blockchain world, where suddenly the problem is how do we govern these technologies without a central company doing it for us, that opens up this huge, huge, expansive set of possibilities. Wow. Everybody just can't believe how wide the space of options are, how many possibilities there are to choose from. And every year, a whole new set of thinking and tools comes becomes available in that world. And I think that that's kind of the laboratory for what could be happening on a much wider basis, not just among the kind of techie early adopters, but among people in service work and in labor unions and in small businesses and large businesses, the clubs, the groups that we find comfort in, all sorts of associations can, I hope, begin to enter into that grand experiment of figuring out what are the next wave of tools that we need. It was a couple of centuries ago there was that kind of explosion of possibilities and people kind of landed on this idea of voting every few years with ballots and sending representatives to the Capitol and all these sorts of things that made a lot of sense in the time of carriages and horses. And there's a lot of good ideas embedded in those discoveries. But today, we're no longer in the age of horses and carriages. And it's very clear that there's a widespread feeling that the institutions of that time are no longer working for today. They're just not reflecting people's needs. They're not solving problems that we have together and that we need deeper accountability that reflects our accelerating world. And also that applies, as I said earlier, and the appropriate points of friction that slow us down when we need to be slowed down. And, you know, I think there's just this craving. And so in my work lately, I've been on the one hand trying to diagnose that problem that I think has been too little noticed, that we are not really having the opportunity to practice democracy in our daily lives and to create the groundwork for the kinds of the kinds of tools, the kinds of companies, the kinds of networks that we need in order to really be able to enter into that experimentation.

Ayden Férdeline [00:21:04] And one of the ways that you've been setting the groundwork is through the Metagovernance Project. Can you explain what it is and what are some of its current activities?

Nathan Schneider [00:21:14] Sure. So I wasn't the founder. It actually started a few years before I got involved through a collaboration, as I understand it, that Lawrence Lessig, the founder of Creative Commons, was doing with a game company that was interested in enabling people, players of their multiplayer game, to set up kind of different governmental structures. So they asked Lessig, how do we do this? And he did some initial designs and then others started picking it up. And I got involved right when I first started publishing on this idea of implicit feudalism. And I was invited into the conversation and it's a group of researchers that we've formed and practitioners who are interested in building tools to enable more dynamic and flexible online governance. We developed a kind of basic framework that we call modular politics. The idea is that decision making systems could be as modular as, for instance, building a website or putting together a selection of apps in your phone, you know, you pick whichever apps you want and they can kind of talk to each other. And the whole thing kind of works as some kind of unified tool for you. And so we, in this outline, we described what it could look like to enable people to move a structure from one platform to another. So maybe you design a voting system that works really well in a Reddit-like environment where you're got a bunch of people sharing links, but then you decide, hey, I want to try that in the online game I'm playing as well and move it over there. And I want to try that in my labor union and you can move it over there and that these could actually talk to each other, basically try to imagine a layer of the Internet in which governance is taken seriously as a space of creativity and play and invention rather than the systems that we have, which are very rigid and designed to have a kind of one size fits all logic where the idea of admins or mods controlling everything is just completely ubiquitous. Instead, in this case, governance becomes a kind of playground in which groups can figure out what is appropriate for them. So we've been developing a bunch of experiments, for instance, I built a tool called Community Rule that's an experiment in an interface design. My colleague Amy Zhang has built PolicyKit, which is an engine for decision making that can be linked up to like a Slack channel or Reddit or other places where people already are. We've got what we call the Metagov prototype, which is kind of building on that and enabling more kind of cross platform interaction so you can make a decision in one platform and have it implemented on another. And so forth. So it's a community. We have seminars every week that people who are interested are welcome to join, they're open, where we hear from somebody who's wrestling with some of these questions and we try to think together, do research together and build together and hopefully create some public goods that will help fuel this. What I hope will be a kind of new opening in creativity around how we self govern.

Ayden Férdeline [00:25:15] And these experimental tools that you mentioned, Community Rule that you fathered and PolicyKit, do you think that these resources may be useful for startups and newer emerging platforms that may want to share power with their users but haven't seen any best practices to replicate or might not be sure of what considerations they need to be thinking through in their earliest stages so that they can share power with their users in a responsible manner? Would these be useful resources for them?

Nathan Schneider [00:25:45] I hope so. I mean, these are still very rough prototypes in the works, and so I'm not recommending them to anybody right now. But I work with startups all the time. I'm talking to founders virtually every day, particularly those that are trying to share ownership and governance in their companies. The people who are exploring this idea, I've been developing with others, of exit to community where they're trying to build a pathway for themselves toward community ownership. And so I see very clearly in those conversations what is missing. There are so many people out there who would love to build a community stakeholder base, but they just don't have the tools to do it. Instead, all the tools are designed for them to be in charge or for their investors to be in charge. And I just went through a process with a team I've been working with for years where they just did a kind of exit process and they wanted to have the deepest possible democracy that they could achieve in a reasonable way that would be a responsible steward for the business. And they had to really compromise a lot of the aspirations they had because the options weren't out there of what they wanted to be able to achieve. And so they had to kind of go with the things that are already on the table and they're still experimenting with some new voting systems and stuff like that, using tokens, block chain technology to do some of this. So they're still very much on the cutting edge. But even there, the feeling among the leaders of this process was much more like we wish we had better options. And that's the kind of pressure I feel every day now is is how can we get better options to these founders? And that includes both the technologies of governance that we've been talking about, but also the legal and financial pieces that can help support that. Right. If you're relying on centralized ownership and financing mechanisms, it's going to be hard to build democratic governance in, because they don't really match. You kind of need to do both of those things. And so it's a very chicken and egg-type challenge where you're trying to advance on democratic governance when the financing structures aren't there yet, aren't so democratic. And you're trying to advance the democratic financing structures, but, you know, people who need to sign off on it, who need to agree to it, aren't sure they can trust the governance. So it's a really tricky moment. But there's also a lot of really good experimentation going on, trying to solve these problems. And I'm hopeful that is possible. Again, I just see the desire all over the place, among among founders, not every founder, of course, but at least the ones I see enough to keep me quite busy, where people are really struggling with these challenges. Some really smart, really determined people and their experiments are going to matter more than my little, you know, my my little research papers and tinkering with possibilities. You know, what really is going to make this stuff go become widespread is when people prove it in their organizations and businesses and activist groups and so forth.

Ayden Férdeline [00:29:44] I'm trying to think through what business models might support an exit to the community, because I imagine that users are going to be expected to make some kind of financial contribution in order for these platforms to be able to survive, which could be exclusionary for some people. And if I can throw in a second question, I'm also curious when you're having these conversations with founders, what kind of impact assessments are they doing, even informally? What are some of the risks that they have to think through? Are some of these emerging platforms concerned from the beginning about how their platform could potentially be misused by bad actors or those who might seek to exploit that alternative governance model in some way?

Nathan Schneider [00:30:26] Oh, those concerns are very real and they're very real particularly in the blockchain world where there's a lot of money at play. Right. And there's a lot at stake and there's a long history of exploitation. If there is an opportunity for exploitation, someone's going to find it. And in some ways, I think that makes for a very powerful experimental environment. Right. Because it's a high pressure set of tests. And there are a lot of things about the designs that are emerging there that I'm not in love with. But I do appreciate that people are working under a high pressure environment to figure out how to make these systems work. And I think that that could result in some really in some stronger designs than if the stakes were a little lower, because people are forced to be very attentive to those kinds of worst case scenario possibilities. And I see that a lot, particularly again in the blockchain world. But in terms of the business models, it's a good question and it's a reason why I think of exit to community, not as one one-size-fits-all strategy, but as a kind of story of mythology that involves multiple models. And so there are some cases where, as you say, it makes perfect sense for the users to be putting skin in the game, putting putting their own money into the process as they become co-owners. An example of this is Meetup.com. Right, which which, for instance, the founder, Scott Heiferman, hopes will eventually turn into a cooperative. He's no longer in control, but it's the kind of thing where the community organizers who use the platform are paying for it. So you could conceivably develop a strategy where part of what they pay is is their ownership share. And you just align their contributions into the business with ownership. So there it's kind of natural fit. In other cases, like with social media, for instance, I think it's harder because people aren't used to paying for it. It might not really make a lot of sense for them to in the long run, I'm not sure. But that's a case where you could consider models, also infrastructure, all sorts of cases where you can look at what has happened in the offline world before. So, for instance, in the US, we have a structure called the employee stock ownership plan that's been part of federal law since 1974. And it's a structure that enables you to finance a worker ownership acquisition so you can borrow money for the workers to buy a company and then they pay it back on their future productivity. So when this happened, for instance, with New Belgium Brewing, a successful brewer that makes beer here in Colorado a number of years ago, there was a company meeting when it was announced that they had just become one hundred percent employee owned. And the workers didn't even know this was happening because they didn't have to put in a cent, they saw all the benefits without the upfront costs. And that's, it sounds a little wacky, except that's how wealthy investors work all the time. They borrow other people's money to make their investments. And so this structure just enables regular people to do that. And so I've argued for what I call based on the inventor. The ESOP was a man named Louis Kelso. So I've written about this idea of digital Kelsoism. So adopting that strategy of financed buyouts for the digital economy. So recognizing in contexts where it doesn't make sense for matters of equality or other issues, for users to buy out a platform up front, it could be a finance transaction, that we might need some new policy tools in order to make sure that that kind of thing is possible. But basically, it seems to me that if wealthy investors can do it, then non-wealthy regular folks should be able to do stuff like finance buyouts as well. We just need to design our systems so that they serve not just the wealthy, but that they serve everybody.

Ayden Férdeline [00:35:05] One more question and I will let you go, I think when some people who haven't researched this field as much as you hear the word "cooperative", they might think of something community-led or on a smaller scale, maybe they think of a grocery store, but there are larger cooperatives. Are there any examples that come to your mind to help our listeners contextualize what cooperatives can look like today? And that demonstrates that they can come in all different shapes and sizes?

Nathan Schneider [00:35:33] Yeah, absolutely. And I think it's really important to recognize that cooperatives can exist at small scales and large scales. I was once at a meeting in Italy, which is a place with a very vibrant cooperative sector. And one of the leaders of that movement said cooperatives can do a lot of things, but there are some limits. They can't own nuclear power plants. That's just too much capital. And I raised my hands in the US we do actually have co-ops owning nuclear power plants. And that's because we have developed, in that one specific sector, very narrowly, a financing mechanism through federal policy that makes it possible. And these models can do can do anything they need to do if they're appropriately conditioned and supported. So in terms of examples at scale, we've been talking about Facebook, for instance, its user base includes something like half the population of the world, more or less. And another company that has a reach in terms of access to the eyeballs and attention of half the population of the world is Associated Press. It's very different. And it's not social media. It's a news consortium, but it has similar reach to Facebook. And it is a cooperative owned and governed by news producing organizations, by businesses. Some cooperatives are owned by other businesses. And actually, one hundred years ago, Associated Press was like the Facebook of its time. Upton Sinclair, the famous journalist, wrote that Associated Press was the most pernicious monopoly in America in the early 20th century. And then, when it was forced by the Supreme Court really, to act like a true cooperative, it had always been incorporated as a cooperative. But when it was forced to really operate as one and it became this kind of benign piece of infrastructure that largely operates in the background without people paying a whole lot of attention. But it's the thing we trust, for instance, when we have a big election to ultimately kind of call which state voted for who and so forth. It has tremendous authority and trust, in large part, I think, because of its corporate structure. Another example is Visa. It was a kind of fledgling business under Bank of America called BankAmericard, trying to get other banks to adopt it. And then none of them trusted Bank of America rightly. And so a man named Dee Hock, who was a kind of bank executive in a regional bank in Washington state, suggested, hey, what if we spin this off into a cooperative that we all co-owned and governed? And that was when it was rebranded Visa, they actually convinced Bank of America to do this and it became a cooperative until later demutualising and becoming a public company. But it was the cooperative phase that really enabled the credit card industry to grow global because it solved the trust problem. You can look at the agriculture industry, you can look at wherever these models have been recognized for their power. Often it requires creating policy that recognizes that they work differently than investor-owned businesses that tend to dominate how policy is set up. But when you do those things, these models can be incredibly powerful, particularly when you're talking about the kind of underlying infrastructure. And when we look at a lot of the platforms that we rely on, the Amazons and Facebooks and Googles and so forth, increasingly we're starting to recognize them as utilities, as things that other stuff relies on that aren't quite traditional businesses, and particularly for things like that, these kinds of cooperative models have proven themselves to be really reliable and accountable mechanisms for precisely the kinds of challenges that we're facing today, where we know we're stuck with these big companies, but we also know deeply that we can't trust them and they're not accountable to us, we just have to hope that they do what we want them to do. That's the challenge. And again, these questions about ownership and financing are really big. And I think we can begin to hack away at them if we also are beginning to practice democracy in our everyday local, online and elsewhere, spaces. If we practice that small scale democracy, I think we start to gain confidence in our capacity to do more democratic structures at a larger scale.

Ayden Férdeline [00:40:47] Professor Schneider, thank you so much. This has been an excellent conversation.

Nathan Schneider [00:40:51] Thank you. It's a pleasure.

Ayden Férdeline [00:40:53] I'm Ayden Férdeline and this has been POWER PLAYS. Thanks for joining us today. Next time on POWER PLAY we're speaking with Julf Helsingius, a Swedish speaking Finn and an Internet pioneer about the time that he was sued by the Church of Scientology. It's a crazy story.

Outro [00:41:10] This has been POWER PLAYS. POWER PLAYS is a production of ETUNU. The guest on this program speak only for themselves, and the views expressed do not necessarily align with those of ETUNU. Copyright 2021 ETUNU Corporation. All rights reserved.