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Committed Sales or Services Cluster

You are currently viewing a revision titled "Committed Sales or Services Cluster", saved on August 1, 2013 at 7:29 pm by Wolfgang Höschele
Committed Sales or Services Cluster

Production of goods or services for a defined service area or community that typically involves a continuing relationship between the service provider and customers/users/members over one or more years (one-to-many, continuous exchange)

Water, sewage, electric, natural gas, telephone, cable etc. utilities; public transport and airlines where there is little or no competition between carriers; transportation (road networks, ports and airports) and telecommunications infrastructure; public parks and places; production of large aircraft, large weapon systems, industrial plants, transportation infrastructure; corporate or government (e.g., military) research which is not to be shared with a wider community; banking, insurance, and other financial services; monopolies in any industrial sector; educational institutions; hospitals and long-term medical care; retirement homes; social services, such as unemployment and retirement benefits; legislation, the courts, arbitration and dispute settlement; law and rule enforcement; government administration and taxation, the military (in its relations to citizens); subscriptions and long-term contracts such as media by subscription, some consulting, coaching, as well as online social networks and community supported agriculture; religious institutions; professional and business associations, chambers of commerce, unions; community development and planning institutions.

Such services can be in the ownership/control of private businesses, the state, workers, the people whose needs are supposed to be met (clients, customers, users, members, citizens, patients, students) or some combination of the above.




Context within NORA


Relationships to Needs

Organizations in this cluster mostly provide services, or capital-intensive infrastructure that supports important services. They entail long-term relationships either because they are linked with residence in a national territory (e.g., the courts) or a locality (utilities, public transportation), or membership in a national community (government services linked to citizenship), or because the service can best be provided in the context of a long-term relationship (health care, financial services, insurance), or because the process itself takes time (education).

The needs most relevant in this regard are:

  • Clean water to drink, provided by water utilities,
  • Being at home in the place where one lives, facilitated by services such as cultural and community development institutions,
  • Mobility to reach the places one needs to go, provided for by public transportation services,
  • Security from bodily, emotional, and mental harm, provided for emergency response services,
  • Shelter/housing which can be provided for by real estate management companies or cohousing groups,
  • Physical and mental health, for which care can be provided by hospitals, physicians and healers  who have long-term relationships with their patients,
  • Opportunities to learn which can be offered by educational institutions,
  • Self expression, important skills for which can also be learned at educational institutions,
  • Participation in collective economic and political decision-making, for which there are governance structures.

Organizations in this cluster should also ensure that the people they employ can get their needs met. Salaries and wages should be sufficient that employees can fulfill the needs mentioned above. However, at the workplace itself, the following needs should be met, or at least not interfered with:

  • Security from bodily, emotional, and mental harm; this includes security when one cannot take care of oneself (e.g., in infancy and childhood, in old age, or due to illness or disability)
  • Physical and mental health, and access to appropriate care in the case of illness or disability Supportive relationships with other people, relationships that empower, that contribute to a gain in personal energy rather than an energy drain
  • Opportunities to learn anything and everything relevant to one's life
  • Meaningful livelihoods that allow people to meet their other needs
  • Participation in collective economic and political decision-making
  • Having enough time to relax, to think, to imagine, to enjoy life, to play, to be alone

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Relationships to Resources

Like all people and all organizations, organizations in this cluster make use of natural resources (air and atmosphere, water, land, living things, and minerals), and physical and intangible assets created by people. In the case of water and energy utilities and transportation services, the natural resource management aspect is especially direct, but it is at least indirectly relevant to all organizations.

Many of the institutions in this category are involved with the building, maintenance, and use of the basic public infrastructures, including communications and transport infrastructure, the urban built environment, and educational, health, and governmental institutions.


Relationships to other Organizational Forms

Self-provisioning cluster

Many services within the committed sales or services category can be offered via self-provisioning within households or families (e.g., taking care of elderly people, long-term care of the ill, support of unemployed people), even though that may place large burdens on the people involved. Many of these services are in fact only offered in affluent countries, because they can be quite costly. Some services may move into the self-provisioning cluster with changes in technology – for example, small-scale generation of electricity from solar and wind energy may soon be sufficiently cheap that people will no longer require the services of centralized utilities, or reorganize them as networks of prosumers.

Community solidarity cluster

Some organizations in the committed sales or services cluster have emerged from a mindset based on community solidarity (e.g., government social services that are supposed to ensure that all citizens enjoy a level of services that is considered the minimum socially necessary), or actually started as community solidarity organizations that became increasingly professionalized (some insurance companies). Many of the services in this cluster can still be provided by community solidarity, or if the formal structures listed in this cluster break down, community solidarity may jump into the breach.

Natural resource management cluster

As mentioned under “Resources,” all these organizations use natural resources and thus are at least indirectly involved in natural resource management. Those that directly exploit resources such as land, water, air, and biological resources have to concern themselves with natural resource management issues directly.

Individual sales cluster

Many of the businesses in the individual sales cluster can be re-organized so as to have a continuing relationship with their customers and thus become part of the committed sales or service cluster. For example, grocery stores usually depend on repeat business by regular customers who live in the area, and can instead be organized as customer-owned food coops. Farmers can establish subscription services with their customers (community supported agriculture or CSA). There is considerable overlap between the individual and the committed sales or services clusters also in the sense that many businesses sell some part of their production by long-term contracts, and the rest in daily transactions.

Sharing/renting cluster

Any business or organization can engage in these kinds of transactions either to make use of things they need only occasionally or for a limited amount of time, or to obtain benefits from assets they own but do not use regularly. Renting or leasing can also occur over the long term if buying an asset would be too expensive.

Free knowledge cluster

All organizations depend on knowledge or information produced by others and thus benefit from knowledge commons. Some organizations in the committed slaes or services cluster create knowledge or information as a primary or secondary aspect of their work. Whether they share this knowledge freely depends in part on their public or private mission, and in part on whether they see this part of their work as being aimed at revenue generation.


Currencies and Markets

Most of the organizations in this cluster sell their services via currencies and markets, and thus have to conform to market logic to some degree. However, they can also be organized according to a logic of community solidarity as mentioned above.

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Understanding current patterns of abundance and scarcity

The goods and services produced in the “committed slaes or services” cluster probably account for the majority of the money economy today, including most government services, education, utilities, infrastructure, most health care, and most of the finance industry (which is as often a disservice as a “service”). All these economic activities deviate in profound ways from basic economic assumptions about “free” markets, including assumptions about the freedom of choice. Free market theory assumes that consumers have choices from whom to buy, which exerts pressure on sellers of commodities to provide high quality at low price. However, if consumers' choices are constrained, the basic mechanism of competition breaks down, and with it the purported benefits of free markets.

The choices in this cluster are constrained not because of government intervention in many of the activities grouped here; it would be more accurate to say that most of these services need to be managed either by non-market institutions in order to achieve some degree of social equity, because under market conditions consumers would have too little choice and hence no power.

The specific reasons why choice is limited vary by the specific sector:

Utilities (water, sewage, natural gas, electricity, cable services, landline telephone service) are usually organized as territorial monopolies. Some utilities (electric, telephone services) can be organized in a more competitive way, but often are still organized as territorial monopolies. In this case, a consumer has to relocate in order to find another supplier (and even that supplier may be the same company). Even if more than one electric or phone company (including mobile phone companies) compete in the same service area, customers do not typically wish to switch from one to the other on a frequent basis, which allows all competing companies to become lax in such things as customer service (e.g., phone calls to machines where it is very difficult to find a way to talk to a human being).

Public transport services can involve competition between several different public or private companies in the same territory, but in that case they are usually inefficient – they can provide better service if all the different carriers cooperate so as to avoid unnecessary duplication. Hence, residents of a locality or country typically face a single consortium of public transport services. The same tends to occur with respect to airlines where these have regional monopolies, either as a result of government intervention or by dividing up the market among each other.

Basic transportation (road networks, ports and airports) and telecommunications infrastructure likewise should not be duplicated unnecessarily and should be run as a single integrated system. Therefore users have little choice but to use it, and most of it tends to be operated either by the government directly, or by contractors who negotiate with the government about prices for service.

Public parks as well as other public places serve the people living in a particular area.

The production of very large-scale items that are needed in comparatively small numbers (aircraft, large weapon systems, industrial plants, transportation infrastructure) can only be handled by a small number of businesses in any one country. Often, the same players offer their services in many countries. In these “markets” there is often effectively a single seller and a single buyer (a government agency), the latter often being open to corruption. After a contract has been signed, there are often huge cost overruns, with no option to switch to a different supplier.

A similar one seller and one buyer relationship can occur in corporate or government (e.g., military) research which is not to be shared with a wider community. Since the knowledge is secret, switching researchers would mean a long learning curve, and incur a risk of the researchers divulging their knowledge elsewhere, and so the buyer of that research can be as locked into its supplier as vice versa.

Banking, insurance, and many financial services depend on the maintenance of a long-term relationship between the financial institution and its clients. People keep savings and investment accounts, and insure themselves, for purposes of financial stability and for security in old age, which implies long-term relationships. Therefore, while customers can switch from one institution to another, they are generally reluctant to do so unless compelled.

Market domination by one or a few players means that others have little or no choice but to buy from them or sell to them. This can occur with many goods that would otherwise be in the “individual sales” cluster. Market domination can take the form of monopoly (one seller), oligopoly (a few sellers), monopsony (one buyer) or oligopsony (a few buyers). The issuing of patents by government can allow companies to establish monopolies, for example in pharmaceuticals and in advanced technology.

Children are enrolled in schools according to the wishes of the state (where there is compulsory education) and/or of their parents; university and other adult students have at least some say in the matter. In either case, switching from one school to the other midstream usually entails considerable sacrifice. It is usually a commitment of several years, and the choices about education one has made remain significant throughout one's life.

The choice of hospitals and long-term medical care is usually dictated to a considerable extent by locality. Even where it is not, the relationship between doctor/healer and patient should be a long-term one if the patient is to be treated as more than a collection of organs, and with knowledge of that patient's medical history. Such a relationship may take time to establish, and should not be broken lightly.

Retirement homes are supposed to serve as a place of comfort where elderly people can receive medical attention as needed; they are not hotels. Hence, their residents do not want to move from one place to another.

Social services, including unemployment and retirement benefits and benefits for people with disabilities, are usually run by government because it is hard to make a profit on such services. The logic by which they are run depend on having a comprehensive database of all beneficiaries, to ensure that everybody gets only those benefits they are deemed to deserve. This requires a centralized service agency.

Legislation and the courts are classic functions of government, based on the idea that the same law should apply throughout a territory, and both sides of a legal dispute should be made to agree on which court has jurisdiction. Arbitration and dispute settlement, which does not depend on the court system, still depends on advance contracts as to how they are to be handled and thus on long-term commitments.

Enforcement of laws, rules, regulations, often by armed security forces (police), are all designed to ensure that there is no ambiguity about which rules we have to follow – whether those are state laws or regulations, or the rules imposed by a corporation or private entity within its property or on its employees.

Government administration and taxation and the military are closely connected, because modern states evolved in close symbiosis with a standing army and the need to obtain revenue to finance it. The activities are all predicated on the assumption of the territorial state; hence if one lives in a particular territory, one has no choice about which government to pay taxes to or by which military forces to be protected (or not).

Various other services occur through long-term contracts or subscriptions, and thus there is little or no choice for the duration of the contract. This includes media by subscription, some consulting, coaching, as well as online social networks and community supported agriculture.

Religious institutions such as churches, temples and mosques, serve a religious community in a particular area. Nobody switches from one religious affiliation to another lightly.

Professional and business associations, chambers of commerce, unions, and other similar organizations represent the interests of specific groups, and do so best if they represent a large fraction of that group. Hence, it is not usually desirable to have excessive competition between more than one organization representing the same social group, and creating such competition has high potential costs.

Community development and planning institutions, as well as “principled societies” (a proposed structure) are supposed to bundle the interests of a particular community, and thus depend on stable membership. The members likewise have an interest in such stability.

Apart from involving constrained choice, or in other words commitment over a substantial period of time, the above relationships are highly diverse, and many of them are far more complex than a market exchange relationship (e.g., student-teacher, patient-doctor, litigants-judge, citizens-legislators, civilians-soldiers, parishioners-clergy, workers-union representatives, citizens-planners). Issues of identity, power, differing degrees and types of knowledge differentiate each of these pairs from the others. Hence, in each of these areas it is important to find tailor-made solutions where both sides share in ownership, control, decision-making, and benefits in a way commensurable with their respective roles and needs. Wherever the concerns of one side are systematically neglected, that side suffers from imposed scarcity.

In addition to the relationships between the “producers” and the “users” of the services discussed above, there are the additional concerns discussed for the “individual sales” cluster: the need to protect consumer interests, the usually poor bargaining position of workers, and the use of natural resources.

The complexity of these relationships, as well as the long-term nature of relationships with “users” or “consumers,” means that simple worker/employee ownership is not sufficient to address the issues of scarcity generation; there need to be more complex models of ownership/control that involve the workers as well as the users of the services involved. This is particularly important where the “producers” have a power of expertise that they can exploit (e.g., doctors, teachers), or are government authorities, or enjoy a monopoly over a vital resource (e.g., water).

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Approaches to creating greater abundance

Note: headings in bold refer to sub-sections of this cluster of organizational forms; approaches to creating greater abundance are to be listed under each heading. This listing is only a tentative start; many more items will have to be added.

Utilities: water, sewage, natural gas, electricity, cable services, landline and mobile phone companies

  • Public utilities
  • Customer-owned utilities
  • Hybrid models

Public transport services

  • Publicly owned public transportation
  • Public-private partnerships

Transportation and telecommunications infrastructure

Public parks and places

Production of large aircraft, large weapon systems, industrial plants, transportation infrastructure

Methods to ensure effective public oversight, to prevent corruption and cost overruns

Banking, insurance, and other financial services

  • Credit unions
  • Mutual insurance companies
  • Microfinance

Note that these are based on scarcity-based currency; see the Currencies section for alternatives to such currencies.

Educational institutions (K-12, universities, community colleges, business schools, adult education centers, etc.)

          Barefoot Revolution

Hospitals and other health-care institutions

Retirement homes and services

Social services, including unemployment and retirement benefits and benefits for people with disabilities


Courts, arbitration and dispute settlement

Law or rule enforcement; police

Government administration and taxation

  • Participatory budgeting
  • Democratic procedures

The military

Subscriptions and services with long-term contracts

  • online social networks
  • community supported agriculture.

Religious institutions

Professional and business associations, chambers of commerce, unions, and other similar organizations

Community development and planning institutions

Principled societies

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Old New Date Created Author Actions
August 1, 2013 at 7:29 pm Wolfgang Höschele
July 24, 2013 at 8:49 pm Wolfgang Höschele
July 24, 2013 at 8:46 pm Wolfgang Höschele
July 2, 2013 at 7:59 pm Wolfgang Höschele
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April 29, 2013 at 7:23 pm Wolfgang Höschele
April 19, 2013 at 9:06 pm Wolfgang Höschele
April 5, 2013 at 7:48 pm Wolfgang Höschele
April 5, 2013 at 7:45 pm Wolfgang Höschele
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