A cooperative that is not a black box

Let’s explore whether such an entity is possible. What are the limits of transparent accounting? For an idea of what is meant by transparent accounting, let’s consider the Transparency Extremist blog. Here are some key criteria:

1. “all ledgers are world-readable in real time (other than those from which it is possible to infer sensitive personal information).”
2. “contract is only enforceable to the extent that it is published, and we will provide exceptions and limitations to this principle to allow for the redaction from published contracts of sensitive personally-identifiable information about individuals (including individuals who are a party to the contract).”
3. “We will review the case for permitting non-disclosure agreements at all, particularly where they directly or indirectly restrain competition.”

The use of words like “permitting” and “enforceable” suggests a statist orientation of Transparency Extremist, but their ideas about accounting, I think, are ripe for implementation in non-profit cooperatives organized for the purpose of economic production. Nevertheless, there is much here that might be helpful in allaying some of the more intimidating properties of competitive economics. ‘World readability’ of all ledgers should take a lot of the friction (and one-upcrittership) out of ‘price discovery.’ Enforceability only of contracts in the public record also means less guesswork; that sinking feeling of ‘getting used’ can be compared against what terms and conditions, in general, people are agreeing to. One can get a relatively objective answer to the quesiton, ‘is this par for the course, or am I a fool?’ There is also the opportunity to ask what you might call sociological questions, such as, are certain demographically identifiable subsets of the population consistently subject to certain contractual obligations?

The question of whether non-disclosure agreements restrain competition is worth considering. Transparency Extremist, of course, seems to voice the view that competition is a good thing, and whether competitiveness needs to be protected from secrecy pacts. I have always suspected the opposite. I understand that price transparency is a fundamental property of competitive markets, but suspect that extreme transparency might actually be more conducive to cooperation than competition. Playing one’s cards close to one’s vest is itself a competitive strategy and a competitive activity in itself.

The exceptions to these guidelines for personal privacy are also instructive. While part of me wants to see how far it’s possible to take transparency in commerce, I do value personal privacy, even thought I suspect that it will turn out to be technologically impossible. In that event, the privacy exceptions to the proposed transparency guidelines are moot. For now, I appreciate the differentiation between individuals and entities other than individuals, such as businesses, and I would assume, cooperatives intended to assume their role in society. I have long advocated differentiating between privacy (which applies strictly to individuals) and secrecy (which applies to what I call ‘institutions’).