Learning from our failures: Lessons from FairCoop

(a summary)

In this post, I will summarise findings from the research process that I initiated in the first online community I started studying: FairCoop. As I will show, this community was quite successful for a few years in federating local groups around the world - mainly in Europe - in the attempt to build an alternative, grassroots economic system and a "post-capitalist commons," thanks in large part to an innovative and ecological cryptocurrency called Faircoin. However, it was then shaken by very destructive conflicts, which interrupted the social learning that was taking place, and led to the near-breakdown of this community.

What happened? And what can social change agents learn from this story?

TL;DR:

• FairCoop (FC) is or was a social movement organisation and a network connecting a grassroots prefigurative community, online and offline, to create a post-capitalist alternative ecosystem based on cooperative and radical social change values. For a few years, FC was quite successful at federating local groups around the world, mainly in Europe, around this purpose. An important tool/project that was developed within FC to achieve this goal was Faircoin, an ecological, community-oriented cryptocurrency.
• During my research, I found that the community was in a state of crisis, due to deep-rooted conflict and financial difficulties. So I invited 15 FC participants to investigate with me the source of these issues, consider what they had learned from their experience, and what lessons other similar projects might draw from this case study.
• A first set of issues had to do with FC's objectives and strategy. Using Faircoin, the community attempted to simultaneously “hack” global financial markets, to extract financial resources that could be fed into a alternative grassroots economy; and to encourage more mutual help locally, and a flourishing “circular economy”. Different stakeholders in the network favoured one goal over the other; and eventually, due to a crash in the market value of Faircoin and to a governance deadlock at the FC General Assembly, the tension between these two goals led to huge conflict that was not resolved.
• besides issues of strategy, the "ways of doing" in FC were problematic. This includes: how power was distributed in the community, to the benefit of a few (through a form of tyranny of structurelessness, and oligarchical power dynamics); how communication tools hampered collaboration or created resentment; and how members were brought into the community (unclear boundaries and processes).
• FC also suffered from problematic "ways of being" - that is, the culture that was fostered within the community, and in particular to the ways in which people related to one another. Mutual care and trust were not given enough attention, and little was done to resolve or transform conflict.
• Overall, while the research participants viewed FairCoop as a site of rich social learning, my understanding is that this community failed to live up to its emancipatory goals, or to centre critical reflection on the personal and collective levels that might have helped people to "unlearn" less generative forms of organising and behaving.

What is (or was) FairCoop?

I first learned about FairCoop at the peak of its success, in 2017. At that time, this community brought together thousands of activists in its online working groups, and in over 50 local groups around the world, focused on creating social change from the bottom up.

The key missions of this community, which I found articulated on the landing page of its website, resonated with my views as regards the radical collective change that I believed was needed on the global level, in the face of our predicament. In particular, the call for an “integral revolution” spoke to me:

"A deep and comprehensive transformation of all parts of society, including its values and structure. The new, self-managed society is based on autonomy and the abolition of all forms of domination: the state, capitalism, patriarchy, and all other forms that affect human relationships and with the natural environment. Conscious and strategic actions are needed to compost the obsolescent structures and recover those values and qualities that enable us to live a life in common. As the most promising entry point for the collective change we see a new economic system. This is giving people the opportunity to finally exit the vicious circle of capitalistic enslavement and its side effects, to find space for new ideas without boundaries and make possible the switch to a healthy life in balance with nature." - FairCoop Integral Revolution manifesto

The other principles listed on that page – about disobedience, open cooperativism, decentralisation, and a stateless democracy – equally spoke to me. Indeed, I believed that shifting to a new economic and political paradigm, away from various forms of domination, was critical to the survival of humanity on this planet – and to the survival of millions of other species.

Another aspect of FairCoop that called out to me, due to my interest in alternative exchange systems, was the cryptocurrency FairCoin. Based on an innovative “proof of cooperation” technical infrastructure, this electronic currency was a keystone of the FairCoop community. Contrary to Bitcoin and its energy-consuming proof-of-work algorithm, FairCoin had a negligible environmental impact, and was designed specifically to empower communities in a fair and decentralised way. This felt like a revolutionary technology to me.

My interest in FairCoop deepened while I lived in Athens, Greece, between July 2018 and March 2019. During that time, I lived in the neighbourhood of Exarcheia, a famous hotbed of rebellious, anarchist spirit. I was able to visit FairSpot, a shop which worked as a meeting place for FairCoop activists hailing from various local nodes around Greece and abroad, and in which a variety of local products could be bought using faircoins stored on an electronic wallet. These encounters gave a very concrete feel to the words of FairCoop’s integral revolution manifesto. I also heard inspiring stories about the bravoury of FC founder Enric Duran, who stole half a million euros from commercial banks in protest against the corruption of the financial system, invested all of these funds into cooperative projects like FairCoop, and went underground to escape from the Spanish judicial system. A documentary was made about him last year, and articles were written in Vice and elsewhere.

Inspired and full of admiration, I decided to carry out a case study on FairCoop as part of my research on radical social change.

An ambitious project

FairCoop (FC) was a project born in Catalonia in 2014. It built on the region's long and respectable tradition of cooperativist and anarchist organising, and drew strength from the 15-M (Indignados) anti-austerity movement that was launched in the wake of the 2008 financial meltdown.

This is how FC introduced itself on its Wiki:

"FairCoop is a global movement of people who are in the process of setting up a self-managed, cooperative, supportive, ecological, and autonomous socioeconomic ecosystem for the transition to alternative models of organization based on justice and equity. […] FairCoop supports the values of cooperatives and put most of them also into practice but FairCoop itself doesn’t have the legal status at all and goes even beyond that traditional approaches of a Coops [sic]. FairCoop has also some characters of a platform cooperative but also here goes beyond that definition due to its diversity of tools and apps. It has traits of a grassroots movement but as its also fueled from the global level and aims to create an alternative and parallel system to the existing one instead of changing the system itself this definition doesn't completely fit neither. What FairCoop is definitely not is an NGO or a company, and certainly also not for profit. Therefore, FairCoop could be defined with the bulky term 'alternative cooperative ecosystem movement' until we find a better terminology."

So FC could be seen as a network of cooperatives, and/or a grassroots organisation. I also view it as a social movement organisation, and as a network bringing together a grassroots prefigurative community, both online and offline. Because my research question concerns the possibility for online networks to bring about radical collective change, I only focused on the online component of FC, not really on the workings of its local groups.

What do I call a "prefigurative community"? A community that seeks to embody (to prefigure), in how it functions and pursues social change, those forms of social relations, decision-making, culture and human experience that its members consider ultimately beneficial for the whole society. Both of the case studies I carried out during my research are about prefigurative communities, although as we will see, the values they embody are quite different.

But what did people do or talk about when they connected to FC online groups? Outside meetings of the General Assembly, their focus was on an impressive array of sub-projects and tools connected within a decentralised economic system, and based on FairCoin. These included FreedomCoop, a European-scale cooperative providing individuals with a toolkit enabling self-employment independently of banks or state authorities; Bank of the Commons, a cooperative providing banking services and other financial tools supporting the needs of grassroots economic movements; but also FairMarket, an online marketplace in which goods and services could be bought and sold in faircoins. For a comprehensive overview of these projects, see the figure below.

FairCoop projects. Infographic by X. Balaguer Rasillo (2021)

An important goal underlying this ecosystem was that of creating a circular economy, defined by FC as “an economy in which the participants are able to find each other and exchange products and services, without the need to go outside of the ecosystem and use Euro or other fiat currency to cover their needs.” Cooperation, fairness and sustainability were focal points: this economy aimed at creating social change, by encouraging its participants to consider ethical criteria in selecting collaborators and suppliers, and to pay attention to various dimensions of sustainability, including working conditions, human rights, and environmental impacts.

The network also grew to encompass several dozen local nodes, which constituted the grassroots base of FC, in which strong relations of trust were cultivated at the local level.

A community in crisis

During my visits to FairSpot, and reading messages in certain FC Telegram groups, I became aware of tensions in the community. However, as an outsider, I had little awareness of the depth of these tensions. It was only after I began my interviews in earnest that I realised that FC was in a state of crisis. While some interviewees put forth the activities of certain local groups and insisted that some key projects born from this community – most notably, FairCoin – were still going, most of them opined that overall activity was at an all-time low. For some, FC was simply “dormant”; for others, it was a “failed experiment.”

As a result, instead of trying to initiate a group that would study how people were learning from one another in the network - which people weren't very keen to do, understandably - I decided to focus my study of FC on understanding what went wrong. I held interviews with 15 participants, who mostly had a long history of involvement with the community. These conversations helped me to better understand some deep reasons underlying the collapse of FC, which I believe will be helpful to anyone involved in similar prefigurative groups; and to get a sense of important positive and negative outcomes that these participants drew from their involvement.

In what follows, I will provide a summary of the findings that emerged from these interviews, along with practical insights I drew from them. These were shared iteratively with interview participants for feedback and clarifications. They were overwhelmingly in agreement with my understanding, although one person found my summary biased in favour of one of the conflicting groups, in spite of my efforts to provide a balanced account. Indeed, unresolved conflict was one important factor part of the troubles that befell FC, as we will see!

What went wrong?

Objectives and strategy: Hacking the markets, or building an alternative grassroots economy?

From the early days of FC, Faircoin was at the heart of the project's activities. This innovative cryptocurrency, based on an ecological and democratic "proof-of-cooperation" algorithm, helped to capture many people's attention, particularly in the era preceding the Bitcoin crash of early 2018. Faircoin's importance was strategic, in that this currency was meant to help accomplish two distinct strategic goals:

1. “hacking” global financial markets, to extract financial resources that could be fed into a alternative grassroots economy; and
2. encouraging more mutual help locally, and a flourishing “circular economy”.

Most interviewees considered that these two objectives were often at odds with one another. The first aim involved listing FairCoin on crypto-exchange markets, and surfing the Bitcoin boom to channel resources into the community; while the second relied on FairCoin to facilitate exchanges among local groups and producers, for example through the online platform FairMarket.

The simultaneous pursuit of these two goals helped to bring together within FC social change activists from various backgrounds, as well as local producers of goods and services. However, these different participants don't seem to all have shared the same level of enthusiasm and interest for both prongs of this strategy, or to have had the economic knowledge to fully comprehend the implications of pursuing these two goals at once.

These two goals translated into a situation of double pricing for Faircoin: the "free market price," which fluctuated, and was determined by the crypto exchange platforms where Faircoin was officially listed; and the fixed "assembly price," decided upon by the FC General Assembly to secure the participation of local producers in the FC ecosystem for them to be able to exchange their faircoins into euros. The assembly price was raised in step with the market price, which kept increasing until the Bitcoin crash in early 2018. After the crash, the market price dropped to a fraction of the assembly price.

However, the assembly price wasn't decreased. As a result, people could purchase faircoins very cheaply on the crypto exchange platforms, and spend them on goods sold in faircoins; merchants then asked to convert these faircoins into euros. The volume of exchange completely drained the FC coffers of euros. All of a sudden, participants couldn't be paid for their work within Faircoop. Conflict that had been brewing already over various topics (governance, tools, etc.) erupted in full force, and tore the community apart.

There seem to be two major learnings here:

It is very difficult (and perhaps impossible?) for a community to maintain a good balance and integration between participating in global financial markets, and building local economy initiatives – particularly if this community has no buffers in place against the fluctuations that affect global financial markets;
When participants with very different ideological perspectives are brought together into a common project, due care should be exercised to make sure everyone is on the same page and fully informed and aware of the implications of strategic decisions that are made.

Ways of doing

By "ways of doing," I mean chiefly the ways in which FC participants organised themselves, in how they ran their projects and made decisions.

Governance

In terms of governance, it seems that FC exhibited examples of the "tyranny of structurelessness." While FC was a supposedly non-hierarchical and decentralised project and network, unacknowledged power dynamics were at play. These patterns gave extra influence to participants who engaged in FC from earlier days, and in particular FC founder Enric Duran, to the detriment of others. This situation, which many experienced as disempowering, was made worse by the rule that no General Assembly decision could be passed (including motions to reverse previous decisions) as long as at least one person opposed such a reversal.

Enric Duran's role has been described as instrumental, both in launching FC and securing energy and commitment around it, but also in failing to make FC's governance more genuinely participatory. Criticisms have focused on the concentration of power in Duran, especially due to his single-handed management of FC funds, and lack of transparency in doing so; the placement of Duran's friends and allies in important roles within FC; and in weighing heavily on how important strategic decisions were made, especially regarding tools and management methods in FC.

That being said, some interviewees also opined that it was all too easy to just blame everything on a single individual, and that whatever failures took place were collective.

Lessons:

Projects like FC should make sure to put into place clear structures to acknowledge the role and responsibility of influential participants, and solid mechanisms to keep these participants accountable to others in their actions.
Decision-making and accountability processes should be open for regular revision and discussion to make sure a diversity of voices can be heard and included.
Emergent, episodic and distributed forms of leadership can be better acknowledged and embraced in horizontal groups, and thus help such groups avoid bureaucratisation or oligarchy.
Critical responsibilities, such as management of project funds, should not be concentrated into the hands of a single person - and if they are, maximum transparency should be exercised towards the rest of the project/community participants.
For more efficiency, a general assembly can be usefully complemented by smaller working groups that are tasked with taking certain decisions, while being ultimately accountable to the assembly.

Tools

Outside the FC local nodes, coordination of FC activities and related projects has largely taken place online, by means of Telegram groups, including many groups open to all newcomers. The use of Telegram, overwhelmingly by means of text messages - including to hold FC assemblies - appears to have been a source of increased misunderstandings and conflict, and to have hampered mutual empathy.

Projects like FC, involving the coordination of activities on behalf of geographically dispersed participants, should make sure not to concentrate major communications on a single medium, especially one that may feel disempowering to some. In particular, arranging video calls might help to complement text-based mediums.

Another tool which generated much controversy within FC was OCP, a system meant to keep track of project contributions and to reward contributors. According to several respondents, the decision to finance and develop this tool was not made democratically; it was too costly; its usefulness was limited; and people could take advantage of it to claim rewards without contributing to the project.

Tools affecting whole project management should be adopted as democratically as possible, and strong concerns taken as useful feedback to improve the decision-making process - especially when engaging large costs.

Membership

The openness of FC's critical management groups meant that new participants could join the project at all times and attempt to make their voice heard. This made the project vulnerable to trolls, but also created expectations of participation that couldn't always be met, thus creating disturbances and other difficulties - especially in the case of new participants with different norms, values, or objectives as those of current participants.

Projects valuing openness should make sure to have ways to properly "onboard" new participants, ensure alignment of norms and values, and filter out "bad actors" who may be harmful to the project.

Ways of being

This category of the "ways of being" covers the culture that was fostered within FC, and in particular the ways in which people related to one another.

Mutual care, civility, and trust

FC, as an action-oriented community, appears to have neglected practices and processes that would have built trust, fostered an ethic of mutual care, and led to the clear articulation of common norms and principles. This apparently aggravated divisions and conflict within the project, and made several participants feel burnt out.

Ways to promote and nurture mutual care are important to build trust, and maintain engagement and cohesion in a project, especially when facing difficult challenges. Plenty of space should be dedicated to this, especially in the case of online projects.

Conflict and factions

As a result of many of the factors mentioned above, two factions emerged within FC, largely centered on issues of governance and management, and conflict has been violent - leading many participants to disengage from the project.

Efforts at mediation were carried out, but failed, largely it seems as a result of lack of faith in the process, or trust in the neutrality and intentions of the mediators. It also appears that some parties in the conflict felt the mediation efforts would not help to solve the deeper issues of problematic governance that they perceived.

Processes for conflict transformation and mediation by commonly approved third-parties should be agreed on (or at least outlined) in the early stages of a project.
When power dynamics are a key cause for conflict to erupt, mediation alone is unlikely to succeed in the absence of collective processes of deliberation that may challenge these dynamics.

Cultural and linguistic issues

The fact that key FC management and governance-related conversations took place via instant text messaging in English appears to have been perceived as a barrier for participation on behalf of people who weren't comfortable reading or writing in English.

Participants whose native language isn't the dominant one in the project should be cared for and helped to take part in the project as best as possible (including via translation/interpretation tools or practices).

In brief

Overall, FC participants do not seem to have found productive ways to explore patterns of behaviour and interpersonal dynamics that can be unhelpful to collaborative endeavours. As a result, the social fabric of the community appears to have been rather weak, all the more so due to different linguistic and cultural backgrounds. And when conflict erupted and spread, there were no structures and practices that might have helped to transform it into occasions for fruitful collective learning and change.

Due to these difficulties, many FC participants experienced burnout, and lost friends or money. Thankfully, they told me that participation in this project was also a source of many new friendships, projects, and tools that were still in use at the time of writing, such as FairCoin. FC also led to much personal and collective learning for participants in the fields of democratic collaboration, community-building, and finance.

To me, this points to a vast potential for prefigurative projects like FC. In this case, an accumulation of interconnected issues eventually led to a significant loss of energy and to the collapse of most social learning spaces in the network; but this does not have to be the case. By combining “ways of doing” more supportive of a participatory democratic approach, “ways of being” fostering trust, care, and understanding, and a sustained orientation toward critical reflection on the personal and collective levels, I believe that an online community may become a place in which to enact radical collective change as the prefiguration of an alternative world. But this calls for much conscious, collective, and sustained attention to processes of unlearning, which may enable people to “compost” unhelpful forms of organising and behaving. I will return to this in Chapter 6.

But first, let's consider another community, which has placed much more attention to relational “ways of being” as part of its prefigurative practice: the Deep Adaptation Forum.