Notes on Cooperative Development (p1)

In 2013, I participated in the CooperationWorks! Cooperative Development training, and even got certified as a cooperative developer (woo!). This was in the midst of a lot of reading and travel to visit various kinds of cooperative enterprises in person, so I took a bunch of notes and wrote it up and eventually came back and broke it into less-unreasonably long blog-ish chunks, and here it is. This is part 1; here is part 2 and part 3

Cooperative enterprise in America began (as did so much else) with Benjamin Franklin. Franklin had witnessed more than a few fires while growing up amid the huddled wooden stocks of Philadelphia, and in the 1730s he started researching various fire-fighting techniques. When in 1736 Franklin started the Union Fire company, it wasn’t like the first time anyone had formed an all-volunteer community association — but it was the first such fire brigade that committed to fighting fires not just on the properties of the brigade’s members, but on any property within their community. By 1740, all the city’s ‘fire clubs’ had converted to this rather sensible strategy; by the 1750s Philadelphia was presumably aflush with pride at its new-found ability to not be on fire. That’s when Franklin took things one step further, calling upon residents of the city to become dues-paying members of “The Philadelphia Contributorship for the Insurance of Houses from Loss by Fire.” It was the first ever mutual insurance company and it is still operating today, the third oldest corporation in the United States. i

This was a full century before the formal practice of cooperative enterprise was pioneered in Rochdale, England. By that point in the mid-1800s, the philosophy and practice of political democracy was all the rage, but the Industrial Revolution increasingly made evident the need for yet another form of people-based power: economic democracy. A group of artisans in Rochdale — facing obsolescence in the face of mechanization and the amalgamation of capital — banded together to form a buying club. As with Franklin, they weren’t the first to do so, but they were the first to make a thing about it, with bylaws and dues-paying (and profit-sharing) membership and, most importantly, a set of guiding principles. The Rochdale Society expanded fast (opening up a school, a library, a shoe repair, and more) and became famous — within a decade, a thousand cooperative flowers had bloomed around the UK and the globe.

The Rochdale Principles would eventually be codified as the bedrock of all cooperatives the world over :

1. Open and Voluntary Membership (cooperatives do not discriminate; their membership is open to any human willing to accept its responsibilities)

2. Democratic member control (members make decisions and set policies)

3. Economic participation of members (members contribute capital and share in the allocation of surpluses)

4. Autonomy and independence (if cooperatives enter into agreements with external organizations, they maintain autonomy as controlled by their members)

5. Concern for community (cooperatives work for the sustainable development of their community)

6. Education and training (cooperatives provide learning experiences for their members and community, especially about the nature of co-operation)

7. Cooperation among cooperatives (coops have an obligation to work together with other coops through local, regional, national, and international structures)

Beautiful! Anglo origins notwithstanding, it all sounds right up our American alleys. Just before the time of Rochdale, Alexis de Tocqueville had marveled in Democracy in America at “the great work of society” underway in our young civic nation, produced by men high and low: “the American learns to know the laws by participating in the act of legislation; and he takes a lesson in the forms of governance from governing.” Participatory democracy is inscribed into our federated republic; it should be a natural fit within our markets.

But as we are most of us sadly aware, there’s a big difference between the constituted power of our country — with its guarantees of liberty and egalitarianism — and the constitutive power thereof, ie the actual means of systemic control, which have from the very beginning been held on balance by a small number of men with large amounts of money. So though one might take a look at the principles of cooperatives and expect to see them practiced everywhere in America, a second look reveals that these concepts run radically counter to our ‘business as usual.’ Cooperatives invert the very nature of capital, such that it no longer entails ownership of the means of production; rather, capital is but a mere factor of production, leveraged for the general welfare of the enterprise’s members.

So while on one hand, cooperative membership in the U.S. today is by some measures vast (in The Cooperative Solution, E.G. Nadeau claims that the U.S. is home to 30,000 cooperatives, with hundreds of millions of memberships among them), on the other hand a survey of those members would turn up only a fraction who carry any consciousness of the above principles, let alone who actively exercise their franchise. Those numbers mostly consist of people in mutual insurance organizations (like State Farm), rural electrical utilities, credit unions. These organizations may be somewhat better-mannered than their privately-held counterparts, with members who still in theory can exert some level of democratic control; but in practice those members probably don’t and may not even be aware that they could. Meanwhile, as to the number of worker-owned businesses in the U.S., estimates span a range between 200 and 500, with less than $500 million in combined annual revenues. (Compare that with the shining beacon of the cooperative world, Mondragon of the Basque region of Spain: it alone consists of 256 federated cooperatives, with more than $19 billion in earnings.)

Why so marginal? ii

To be sure, the U.S. legal system isn’t helping, and sometimes it actively hampers; worker cooperatives can’t even legally exist in 13 states, and there’s (as of yet) no national legislation addressing them. But is it possible to separate this political reality from our cultural reality? Could it be that cooperatives are marginal because cooperation in American life is marginal? Building and sustaining a business ain’t easy, and true little ‘d’ democracy is really hard. If in fact we were ever good at it, Tocqueville would hang a shamed head at the site of the state of our union today.

Well. These things do come in cycles. The major 20th Century wave of cooperative development occurred in the 1930s, when the wheels of our modern economy had come off and the viability of alternative solutions was often a matter of life or death. We’re now half a decade into the greatest economic crisis since, and nobody’s predicting any bright futures any time soon. In a world with diminishing resources and compounding systemic instabilities, the capriciousness of capital is more dangerous than ever. We’re going to need to be more resilient on every level, starting at the ground — with local institutions, businesses, schools, shoe repair, whatever, owned and governed by the people who depend on them.

Perhaps a new era for cooperation is dawning.iii But do we still have it in us? Calories come real cheap these days, and our culture is so loud and fast that maybe real signals of danger are just getting drowned out within Total Noise. For all the potential of information technology to facilitate communication and organization, maybe that’s countervailed by innumerable ways in which we’ve become isolated from each other, our cooperative potentials perpetually dispelled before they can mature. The best time to try a new thing is when the old thing just plain stops working; will we be ready for it? Will it be too late? These questions flicker my flame.

10. December 2013 by
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