Why a Co-operative? - A Structure for Growing the Commons Without Depleting It

Årc is managed based on the principles of a co-operative (Co-op). But why did Årc choose this structure instead of the corporate model used by most businesses? It is not a matter of having higher ideals. We chose it because it is the structure that makes the most sense for our purpose: growing the commons.

This is a slightly longer read, but let's trace the reasoning from its roots.

1. The Commons Always Raises the Question: “Who Governs It?”

In our article “What Are the Commons?”, we introduced one of Elinor Ostrom's key findings:

The commons can endure for centuries without relying solely on either markets or the state—as long as the people who use them also care for and govern them together.

Turn that around, and it also becomes a warning:

If the people who use the commons are separated from those who govern them, the commons cannot endure.

If that's true, then the question of who owns and who manages the commons is not an operational detail to be decided later. It is the most fundamental part of the design—one that determines whether the commons will thrive or eventually fall back into the logic of the market.

2. The Conventional Corporate Model Is Not Well Suited to the Commons

Most modern businesses operate as conventional corporations. It is an extremely effective invention for gathering large amounts of capital and generating profits efficiently. But when we try to grow the commons on this foundation, a structural conflict emerges.

A conventional corporation separates three roles:

The people who invest and own — ShareholdersThey may never even visit the place. The people who use — CustomersThey pay, consume a service, and leave. The people who manage — ManagersThey are entrusted by shareholders with the responsibility of maximizing profit.

This structure creates a certain gravitational pull. Managers are expected to generate greater returns for shareholders. As a result, the place itself gradually becomes less something to care for and more an asset from which value should be extracted. Things without a market price—the texture of everyday life, the beauty of the land, relationships between people—are either cut as costs or enclosed and turned into commodities.

This does not happen because managers or shareholders are greedy. It happens because the structure naturally directs power in that direction. The enclosure we explored in the previous article is one consequence of this gravitational pull. Trying to sustain the commons on the foundation of a conventional corporation is, in a sense, like trying to build the commons on top of a system designed to dismantle it.

3. Co-op — Where Owners, Users, and Managers Overlap

The Co-op emerged as a structure designed to overcome this very separation. Its history goes back to 19th-century Rochdale, England, where workers pooled their money and ran a store themselves to protect their livelihoods—an initiative widely regarded as the beginning of the modern co-operative movement.

The defining feature that distinguishes a Co-op from a conventional company is simple:

The people who invest and own, the people who use, and the people who manage are the same people.

They invest, use, and manage. These three roles overlap within each member. As a result, there is no pressure to extract profits for shareholders who may never engage with the place. What members seek from the organization is not a dividend for someone far away, but greater richness in their own lives.

Årc is managed based on this principle. Co-Owners invest in Årc, use it as a “1.5 base” in their lives, and participate in its management. Investment, use, and management overlap within each Co-Owner—and Årc is formed by this collective of individuals. This is the structure at the heart of Årc's Co-op model.

4. Not Idealism, but a Rational Choice

When people hear the word co-operative, they may imagine something admirable in principle, but less efficient than a conventional corporation—a somewhat idealistic choice.

But this view misses one important point:

What is rational always depends on what you are trying to achieve.

If the goal is to maximize an individual's financial assets, a conventional corporation is rational. It is a highly refined structure for concentrating capital and maximizing returns.

But that is not Årc's goal.

Årc's goal is:

To grow the commons over time, without depleting it.

And for that purpose, the answer is different.

As Ostrom demonstrated, the commons can endure when the people who use them also govern them. If so, a co-operative—which brings together the people who use, govern, and support the commons within the same individuals—is the structure that makes the most sense for this purpose.

In fact, viewed against this goal, operating the commons through a conventional corporate structure could be considered the less rational choice.

Co-op model is not a choice to sacrifice efficiency for the sake of ideals. It is the structure we arrive at most rationally when we start with the purpose of growing the commons and work backward from there.

5. How Årc Puts It into Practice

Årc translates these ideas into concrete rules and structures. Here are five of the key ways we put them into practice.

① オーナーシップによる意思決定 ── 多数決を、あえてしない

Let's begin with how decisions are made.

In a conventional corporation, voting power is proportional to capital: one share, one vote. The more someone invests, the greater their influence. This makes sense according to the logic of capital. But it also means that those with more money have a louder voice.

Co-operatives are fundamentally different. In principle, each member has one vote, regardless of how much they have invested. This is one of the core principles of the modern co-operative movement: democratic member control. Whether someone invests more or less, they remain equal in decision-making. Money does not determine the weight of a person's voice. In this sense alone, a co-operative can be considered more democratic than a conventional corporation.

But Årc takes this one step further. Neither the Board nor the Co-Owner General Meeting makes decisions by majority vote.

Why? Because even when everyone has an equal vote, majority rule still has a structural limitation. Ultimately, the majority wins, while minority voices lose and disappear. Once one side crosses the 50% line, its position prevails and the rest are left behind. But the majority is not always right. Sometimes an important possibility exists precisely within a minority voice. We believe this structural limitation is also one reason democratic politics today can become divided into opposing majorities. Is choosing “whatever has more votes” really democratic? Årc questions that assumption.

Årc's answer is ownership-based decision-making. Through dialogue, we listen to one another, and when someone develops the intention to make something happen—“I'll take responsibility for this”—that ownership becomes the starting point for action. Other members welcome that ownership and contribute what they can to help make it happen. This means that even an idea held by only a few people can move forward if someone has strong ownership of it. What moves things forward is not the number of voices, but the strength of intention and willingness to take responsibility.

Why ownership rather than numbers? There are two reasons.

First, ownership is what actually makes things happen. Even if a hundred people say, “That's a great idea,” nothing happens unless someone says, “I'll do it.” The number of people who agree does not make something real. Things take shape only when someone actually acts and takes responsibility.

Second, strong personal intention is also a source of creativity. There is an idea proposed by Peter Koenig known as Source Theory, or the Source Principle. It suggests that every creative initiative has a Source: one person who takes the first step, accepts the risk, and carries the original vision. From this perspective, something new does not emerge primarily from majority agreement. It begins with the intention of one person—the Source. Majority voting can flatten the distinctive role of that Source, while ownership-based decision-making can recognize and make use of it.

This is why Årc chooses to create a place where things begin with each person's genuine intention—their ownership—rather than moving people through orders or rewards, or depending on someone's self-sacrifice.

Choosing not to use majority voting is not a retreat from democracy. Rather, it is an attempt to move toward a deeper form of democracy—one governed neither by the amount of capital someone holds nor by the sheer number of people on one side, but where each person's genuine intention has room to live. And we believe this is the form of decision-making that allows the commons to remain a living practice—commoning—and to continue being cultivated creatively.

② Rights Come with Responsibilities

To avoid misunderstanding, Årc is not legally incorporated as a co-operative. Co-Owners invest in SHIFT-x, a limited liability company that operates Årc as well as other businesses. Through our own articles and agreements, we have formed a voluntary association for the Årc business—the Co-Owner Association—and the capital invested by Co-Owners is used for Årc.

Co-Owners have several rights, including participating in the General Meeting and the Board, proposing projects, staying at Årc within their allocated nights, and receiving dividends.

At the same time, they also have a responsibility to send members to the Årc Board, which makes important management decisions: at least one member representing SHIFT-x and at least two representing the Co-Owner Association.

If this responsibility—having at least two Co-Owners participate on the Board—is not fulfilled, the Co-Owners' rights for that fiscal year are considered waived. The right to use the commons is inseparably linked to the responsibility to govern it. Here again, the principle that “those who use it also govern it” is clearly embedded in Årc's structure.

③ Profits Flow Toward Strengthening the Commons

Årc does distribute dividends. Surplus profits from the business are distributed to Co-Owners according to their investment ratio. But Årc intentionally places limits on how financial value can be extracted.

Our rules explicitly state that the Årc Village business is not an investment designed to increase personal financial assets. As a general rule, gains from the sale of the property or residual assets from the liquidation of the company are not distributed. Surplus generated through everyday operations can be shared, but the underlying commons itself cannot be converted into cash and extracted.

In other words, the valve through which value can be extracted is deliberately restricted from the outset. This structurally prevents the commons from eventually being dismantled for someone's private gain.

④ Ownership That Is Neither Privatized nor Locked Away

Co-Owners cannot freely sell or transfer their rights to others. However, if someone needs to give up their rights and another person wishes to join around the same time, those rights can effectively pass to the next person through discussion by the Board.

In other words, ownership is neither bought and sold as an object of speculation nor permanently locked away with someone who no longer needs it. It is designed to circulate quietly toward people who genuinely need Årc and are willing to take ownership of it. Ownership itself remains open, rather than enclosed.

6. What the Co-op Model Means to Årc

Here, once again, is how we define it:

The Co-op model is a way of organizing a business in which the people who invest, the people who use it, and the people who manage it are not separated, but brought together within each Co-Owner.

Those who use it are also those who govern it. By bringing these roles together, energy flows not toward consuming the commons, but toward growing and caring for it.

This is not an idealistic choice driven by good intentions. It is the most rational choice when we work backward from our purpose: to grow the commons without depleting it.

By putting this model into practice here on Yakushima, Årc is exploring how the commons can be sustained and passed on to the next generation.