Is There Safety in Numbers? Organizing as a Cooperative in the Freelance Economy

Abstract

Freelance work is becoming increasingly ubiquitous and pervasive across multiple sectors of the economy. Freelancers are especially vulnerable to hazards of opportunism, and lack the protections traditional workers typically enjoy. In the current study, we enquire whether organizing as a cooperative can aid freelancers in overcoming the challenges they face. To address this question, we conduct a single in-depth case study. We selected Magnum Photos, an exclusive freelancer cooperative agency, founded in 1947 to further the interests of its members. We find that the agency adopted a novel organizational cooperative form we entitle entrepreneurial club, in which the members, who are carefully screened and selected, retain individual property and decision rights. This novel form served to mitigate agency problems, facilitate innovation, reduce transaction costs of exchange, and ultimately contributed to changing the established rules of the game in the field of photojournalism. Currently, Magnum is considered to be a flagship organization in the profession, although the exponential increase in size has led to recent organizational changes. Predicated on our analysis, we suggest that organizing as a cooperative along the above espoused parameters is more beneficial for freelancers than following an atomized approach.