Mendo Island Journal — Timely. Useful. Sometimes Cranky.

Cooperatives are the biggest secret in the world economy…

In Around the web on February 14, 2012 at 5:40 am

From DAVID BOLLIER
On The Commons

Cooperatives employ more people than multinational companies

There’s more than Olympics and Elections going on in the coming months. 2012 has been named International Year of Cooperatives by the United Nations [6] in recognition of the fact that more than 800 million people around the world belong to one of these economic networks. Coops flourish in all sectors of the economy proving that economic efficiency and equitability can co-exist. They represent a commons-based alternative to both the private market and state controlled enterprises.

Four in ten Canadians are coop members (70 percent in the province of Quebec). In the U.S. 25 percent of the population belongs to at least one coop ranging from credit unions to food coops to major firms like REI and Land O’ Lakes dairy, according to the International Co-Operative Alliance [7] In Belgium, coops account for 20 percent of pharmacies: in Brazil, 37 percent of all agricultural production is from coops; in Singapore, coops account for 55 percent of supermarket purchases: in Bolivia, one credit union handles 25 percent of all savings; in Korea and Japan, 90 percent of farmers belong to coops; in Kenya, coops account for 45 percent of the GDP; in Finland, 34 percent of forestry products, 74 percent of meat and 96 percent of dairy products come from coops.

Around the world, coops provide 100 million jobs, 20 percent more than multinational companies. But what’s most remarkable is how little attention they receive in business coverage or anywhere else.

“We may be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing.”— Gar Alperovitz

While a great many commons seek to develop alternatives to conventional businesses – and even to bypass markets altogether – the struggle to democratize capital should not be lost in the shuffle. Popular ownership of capital

assets and business enterprises is still a great strategy for building the commons and advancing the public good. Fortunately, there’s a growing enthusiasm for this approach.

One of the most eloquent advocates for socially friendly forms of capital ownership – the French call it the “social economy” – is Gar Alperovitz, a historian and political economist at the University of Maryland and a founder of the Democracy Collaborative [10]. Alperovitz’s 2005 book, America Beyond Capitalism [11], was recently re-issued, presumably because it speaks to the political moment. How can we make economic progress when banks and large corporations are simply looking out for themselves? How can we reduce wealth inequality when government is captured by corporations and the affluent?

Alperovitz showcases the history and great potential of co-ops, worker-owned companies, and urban land trusts. He notes the constructive role that is played by municipal utilities, state-owned banks and state-chartered trusts such as the Alaska Permanent Fund. There are also dozens of cases in which states use their investment dollars to help communities, use government procurement to help worker-owned businesses, and provide venture capital to startups.

These alternatives to traditional capitalist models are actually flourishing, Alperovitz notes: “We may be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing. Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.”

The great virtue of Alperovtiz’s hybrid “wealth building” models is that they “challenge dominant ideologies which hold that private corporate enterprise offers the only possible way forward; and they help open new ways of conceptualizing practical approaches to meaningful larger scale democratization.”

As a theoretical approach, Alperovtiz focuses on the democratization of wealth; the mobilization of communities, especially at the local level; the decentralization of power; and democratic planning in support of community and long-term ecological and economic goals.

Yet theory is not used here as an ideology or as a rhetorical posture. It is a way of describing projects that work. That is what makes so many of the examples in this book so appealing: they work. Chapter 7 surveys worker-owned firms as viable alternatives to footloose corporations. Chapter 8 describes “enterprising cities” that use their land, infrastructure and other resources to generate money for public purposes. Other chapters deal with local democratization and larger-scale “public trusts.”

Alperovitz has focused a lot of his energies on Cleveland, where there are a variety of worker-owned businesses. Perhaps the most notable is the Evergreen Coop [12], which consists of a “green” institutional laundry, a solar-panel installation coop and hydroponic agriculture businesses. The details of these and other stories add up to a refreshing approach to economic and community development.

Alperovitz writes:

“Almost half the states manage venture capital efforts, taking partial ownership in new businesses. Calpers, California’s public pension authority, helps finance local development projects; in Alaska, state oil revenues provide each resident with dividends from public investment strategies as a matter of right; in Alabama, public pension investing has long focused on state economic development….

“In Indiana, the Republican state treasurer, Richard Mourdock, is using state deposits to lower interest costs to employee-owned companies, a precedent others states could easily follow. Senator Sherrod Brown, Democrat of Ohio, is developing legislation to support worker-owned strategies like that of Cleveland in other cities. And several policy analysts have proposed expanding existing government “set aside” procurement programs for small businesses to include co-ops and other democratized enterprises.

“If such cooperative efforts continue to increase in number, scale and sophistication, they may suggest the outlines, however tentative, of something very different from both traditional, corporate-dominated capitalism and traditional socialism.”

In a recent New York Times oped piece, Alperovitz noted that “this year some 14 states began to consider legislation to create public banks similar to the longstanding Bank of North Dakota; 15 more began to consider some form of single-payer or public-option health care plan.”

So long as the national debate is locked into the old categories of “capitalism” vs. “socialism” — as if they were the only choices, and as if each were a monolithic creature — we will be stuck in a ditch, unable to bring about any systemic change. But if we can begin to see how a diverse array of community-based business models are succeeding, we may just glimpse a productive path forward.
~
See also Mondragon: The Loving Society That Is Our Inevitable Future
…and Cooperative Business
~~

  1. Many of our catchwords, “democracy” is one, superficially symbolize situations in our minds that don’t actually exist and are employed, in effect, marketing terms by those with special interests. The idea of “cooperative” originally centered on employee owned operation for employee benefit; they cooperated for their common good; they were anarchist organizations.

    The corporate mentality has perturbed cooperatives into a type of hierarchal organization where non-owner employees are hired, the supposed owners receive special considerations for a membership fee rather than monetary dividends for stock ownership, and services are often available to all others. As with other corporations, non-profit or not, those at the top of the management hierarchies are the one who invariably benefit. Also as with corporations, growth is a fundamental driving force, again to management’s advantage. Democratic involvement, except by the usual ineffective and unrepresentative in-grown corporate boards dominated by management, doesn’t exist. Am I too harsh? Give me a counterexample. In other words, though supposedly liberal institutions, the average cooperative today is driven by capitalist motives and behaves like a capitalist institution because, management will say, it is more efficient. Of course, there are exceptions such as Mondragon apparently.

    It should be clear to all of us by now that representative democracy, whether in the guise of government or corporation, is a sham invariably serving special hierarchal interests. I have the perhaps strange idea that we all have worth and that dictatorship of the majority, which is actually usually dictatorship by the powerful few, is not acceptable for our greater good. Show me a counterexample. Consensual oversight of any shared activities and commons surely is required for the common good. Yes, that wouldn’t be efficient or maximize profit and growth. But, surely it is obvious those are dead horses that we can no longer afford to beat.

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