Tucked away far off the trail tourists might follow in Bologna Italy, under a bridge next door to a police precinct in a semi-industrial sector of town and housed in a dusty dilapidated warehouse, is where one can find arguably the world's prime illustration of how the co-operative economy is the future.

This co-operative enterprise is called Piazza Grande. Don't feel left out if you haven't heard of it. The taxi driver didn't know where it was either. And now that my correspondent from Piazza Grande, Massimiliano Salvatori, has informed me that it burned down the evening of my visit there in July this year, it may never get the recognition it deserves.

Piazza Grande is nominally a social cooperative, meaning that, unlike consumer coops, which are formed by groups of buyers, and unlike industrial coops, which are formed by groups of producers, this social coop is formed by users of a social service.

The social service in this case is housing for the homeless. Like most cities in Europe and North America, the City of Bologna spends a portion of its budget providing housing of some kind for the homeless. Ten years ago, the City decided to contract out a portion of that service in an experiment to see if the private sector could provide better quality housing at a lower cost.

A group of homeless young people in Bologna responded to the tendering of these contracts by forming themselves up into a cooperative company and bidding on one of the contracts. The main attraction of their bid was the fact they were a private sector company comprised of the same homeless people who would avail themselves of the housing provided. They won their contract.

Like a lot of social services offered by governments, housing for the poor is often done badly and can do as much harm as that which it seeks to alleviate. Because governments are big operations, changes to how things are done, and changes to which services are offered, take a great deal of effort and time. What is worse, the problems are often diagnosed by uninvolved professionals, and their solutions are just as often as problematical as the situations they are meant to fix.

This is a widely known phenomenon, and it isn't always only right wingers who find the public sector too involved in micromanaging services that could be better managed by smaller operations in the private sector. But the traditional private sector is also interested in profit, making any savings for government by relieving it of responsibilities less than what taxpayers would hope for. Either that or the profit margin requirements dictate an unacceptable curtailment of the services being offered.

Typically in Canada, it is the non-profit sector that has stepped up, solving both the profit issue and the issue to do with the distance between decision makers and those who live with their decisions typical of the public sector . But non-profits are still usually run by uninvolved professionals who describe the problems to be solved in other peoples' lives, and prescribe the solutions for them. Not only do professionals often fail to identify the true problems or to anticipate new problems with their solutions, but the actual users of social services remain powerless in the forces controlling their own lives. That situation alone can make even correct solutions fail.

It's a problem seen throughout all sectors of the economy: everything works better if the actual people who do the economic activity the organization performs are in control of the definitions of their jobs and how they go about doing them. Forward thinking companies take advantage of this fact by offering employees stock options in the company they work for. The idea is to tie them intimately to the success of the company, and it works wonders.

These types of operations, however, usually only part with a small slice of ownership for the employees, and they certainly don't give employees a voting majority.

This is where the co-op company is miles ahead into the future and leaves in the dust the most forward thinking of traditional private sector companies. The co-op not only gives the employees in the company a majority voting share, but they give all shares to the employees. In the case of Piazza Grande, the housing co-op is wholly owned and operated by the homeless members who belong to it.

If the leading traditional private sector companies have excelled in the economy because they have pretended to include in the fortunes of their company the interests of the employees who work for it, then it stands to reason that co-op companies, which actually do include the interests of the members to the highest degree possible, will come to excel even further ahead in the future.

Piazza Grande is a great example of what could be the future of that half of the entire economy known as the public sector. To raise operational cash for their various operations, and also provide clients—themselves—with productive work, Piazza Grande began, for instance, a throw-away collection business. Out of the heaps of rubble some workers collect around the city, other workers find useful objects and parts, like bicycles and cooking range elements, refurbish the items, and sell them at weekly sales held on-site.

The clothes division is very busy converting bags of discarded clothes from Bolognese into an exhaustive collection of costumes for the thriving theatre sector in Bologna. The division that grew up collecting useful bicycle parts has evolved into a fledgling bicycle repair business.

Most impressively of all, Piazza Grande launched a year ago its own newspaper by the same name. The paper is sold on the streets of Bologna for donations readers make to the sellers—providing yet again more productive employment.

The paper is an impressive 12-page bi-monthly that passionately advocates for issues important to the homeless sector of Bologna and aims to increase respect for the homeless as full-fledged members of the citizenship who have an equal claim on City services and attention as those with homes do. The back page contains a comprehensive guide for the homeless on where to find showers, beds, food, medical help, and lawyers.

There are no magic bullet solutions to homelessness, or to any of the other social problems that are part of the modern city experience with the economy . There is also no perfect way of operating a business, or of operating any government service.

But we know that the sheer size of government is the chief hindrance to effective delivery of services; that the most efficient and effective businesses are those that tie employees' compensation to the fortunes of the business; and that social problems are best alleviated, whatever the proposed solution, when those affected are involved in providing decisions and solutions.

The co-operative model allows for small, local delivery of services, it automatically ties those who work for the co-op to the fortunes of it, and it can, as in the example of Piazza Grande, involve those affected most by the modern economy's social problems in the creation of decisions and solutions to those problems. And Piazza Grande is only one of thousands of innovative, entrepreneurial co-operatives that make up 40% of the economy of Emilio Romagna, in northern Italy. It is the future, sooner or later, because it's the only model that succeeds, and Piazza Grande, only temporarily set back by a fire, is a living, breathing example of exactly how.

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