Notes on Cooperative Development (p3)

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 3; here is part 1 and part 2

So let’s take a moment to reflect. The entire second half of the post above — about developing a Feasibility Study and Business Plan for your cooperative — was concentrated entirely within Day Two of the CooperationWorks! workshop’s five days.

It was a grueling day. I walked out bedraggled and daunted. In the brief time available for an evening outing, I gauged the temperature of my fellow trainees: my feeling seemed to be shared, especially among the lone rangers (the people who’d been sent by organizations seemed to be taking it more in stride). Several folks who’d had cooperative development experience already under their belt acknowledged that we’d just been shown a whole mountain of knowledge via fly-by, and they were quick to point out that we (the would-be cooperative developers) weren’t supposed to be the ones to do all that work. We were just cracking the whips or herding the cats or patching the quilt or whatever other metaphor might be most appropriate.

I get that. I’m game for that. And look, I believe in People Power. The agents who should be most active in the process of meeting a community’s needs are the members of that community itself. But let’s be real, what we’d heard that day entailed primary research (surveys and focus groups and interviews), secondary research (demographics and census data; industry standards; with as much granular specificity to your local environment as possible), disciplined analysis thereof, legal expertise, and management skills. “Don’t forget accounting,” someone reminded me. Right, accounting. Ugh.

In any given community group you may have people with some of these skills; and I also believe that any given group of people can eventually learn the stuff above. But how can you create that learning opportunity if this all has to be figured out up-front just to launch?

To this question, I got the following answer: “Well, you hire people to do it.” Professional analysts, lawyers, accountants, etc.

Not only that: “Ideally, they should be specialize in cooperative application.”

Finally, the kicker: “And, there’s only, like, half a dozen lawyers and accountants in the country who specialize in cooperative law and accounting.”

I don’t know if that’s actually true; but the point stands. According to this model of cooperative development, all these barriers to entry must be scaled with the paid services of professional sherpas. Such a sherpa probably won’t come from the community, and probably won’t be around for the long haul. Here there seem to be some serious tensions between reality and the Cooperative Principles; hence, I suspect, the gap between the great potential of the cooperative economy and its current marginal existence.

In order to make a sustainable cooperative, it must be viable as a business, and so you need all the expertise needed to start an actual business; this is expertise normally only affordable by concentrated capital. And then on top of that you need to figure out how to make this business work democratically, such that people (with potentially conflicted interests and divergent capabilities) all stay on the same page; this may be more effective in the long-run, but it’s also less efficient in the short-run. And so the odds stack yet higher.

During the rest of this monstrous Day Two, we discussed approaches to raising large amounts start-up capital from large numbers of cash-limited members; and we also discussed the primacy of education as a component of the process of a steering committee formation, board development, and general leadership cultivation. Elsewhere, I took note of a strategy that established a ‘slush group’ of experts, who did the heavy lifting on Feasibility Study and Business Planning, but ultimately reported to and took orders from a steering committee of non-expert members.

But ultimately the most vivid lesson that I took from it is that the success of a new cooperative enterprise is tightly contingent on the presence of other cooperatives in that community, the health of the surrounding cooperative culture. Hence the impressive number of cooperatives there in Madison, where it’s practically mainstream.

And what about communities with little or no precedent for cooperative enterprise? Wherefore chicken; whenceforth egg?

This conundrum becomes especially daunting when considering the reason that brought me and many others to the table: the hope that cooperatives can be a tool for social justice. And I was reassured to hear CW trainers repeatedly refer to social justice as a primary objective — that this is all of a piece with the broader political struggles for equality, dignity and fairness — though it sometimes felt like a reminder, if not an afterthought. i

Hard as it may be, I can readily envision ‘critical paths’ for cooperative development among communities with high levels of education, social and financial capital, free time, health, etc — and by all means, go forth! But it’s hard to imagine this process undertaken by people who are struggling with various forms of oppression and deprivation. And ultimately, I suspect that cooperatives will not be able to emerge from the margins of our economy until they become viable at the margins of our society.

We did see some provocative examples that tackle this conundrum, seeking justice through “solidarity as a business model.” Often this entailed hybrid approaches, relying heavily on intensive cooperative development with expertise from outside the community, with complex organizational structures to ensure the cultivation of proper leadership, and the interests of multiple stakeholders delicately balanced and bound together.

For instance, consider WAGES — a 501c3 organization that incubates domestic worker cooperatives. WAGES is not, itself, a cooperative. The organization itself recruits and trains immigrants, who often don’t speak English, to both clean houses and eventually manage their house-cleaning business themselves. So far, in 20 years WAGES has spun off at least four coops, which are now employing almost 100 worker-owners. ii

We also heard an impressive case of Mercado Central (a longer writeup here) which really highlights the ideal of cooperative development as community organizing. A large market in Minneapolis that houses 45 Latino-owned food vendors and also offers classes in entrepreneurship and management, Mercado Central is an unlikely success story that highlights the best of ‘Asset Based Community Development.’ These cooperative developers shifted their mode of engagement with a community — from providing services to people in need (i.e. trying to solve their problems) to exploring and promoting their skills and interests (turns out they had the ambition to own their own businesses!). The city’s Latino Economic Development Corporation provided legitimacy, expertise and facilitation through the planning, siting, and capitalization of what is now a thriving market employing 165 people, with $10 million in revenue. (This story, too, contained its hazard signs: the presenter indicated that the market is struggling with internal factions that threaten its democratic culture. A warning that once you’ve scaled the mountain to launch your cooperative, there will still be beasts around every bend; the struggle is ongoing.)

And of course the Evergreen Cooperatives. As a project, Evergreen may be unprecedented in scale: a brainchild of the Democracy Collaborative (in association with Gar Alperowitz), Evergreen was developed through a long-term evaluation and planning process in Cleveland, Ohio. Cleveland was chosen as a site for two primary reasons: first, its long-term decay indicative of so many mid-sized cities in post-manufacturing America, yet second, the presence of universities and hospitals as ‘anchor institutions’ through which the lion’s share of the remaining economy of the area flows. By engaging these institutions — surveying their needs and spending habits — the Democracy Collaborative identified a set of services that were being outsourced to out-of-town firms but could be met by locally-owned worker coops. The Evergreen Cooperatives developed around this analysis, through intensive incubation of a laundry service, a local hydroponic farming operation, and a solar energy company. All are staffed by local residents, contracted by local anchor institutions, and presumably on their way towards worker-management.

Evergreen is inspiring in strategy and scope — but I think it’s also troubling, for a few reasons. It’s taken up a lot of mental space in the cooperative field and the solidarity economy at large; everyone knows about it, to the point where it (alongside Mondragon) dominates the landscape of imagination. Yet, also like Mondragon, it’s hard to imagine ways to replicate Evergreen in other contexts. It emerged from a top-down, closed-door, well-funded process of research and development — hardly something that any committed group of cooperators can model in their own communities. It’s a primarily top-down operation, designed and conducted by a closed board of mostly old white men, who are setting this up for a community that is not theirs; perhaps it’s not surprising that details are rather scarce about how the workers will actually become entirely autonomous as owners and managers. And finally, Evergreen’s theory of change is also projected across a timeframe of decades; we’re going to have to wait a long time for any lessons to learn about its success or failure to percolate outward.

So I wonder. (And my own journey is just beginning; more satisfying answers may well lie ahead.) Are there ways to lower the barriers, to grease the wheels, to lessen the risks that seem to make cooperative development such a daunting prospect outside of thriving cooperative ecologies like Madison?

The stakes are huge. At one point we discussed the “growing edges” of the cooperative economy — fields where coops are only just getting started, and/or have tremendous potential. Nadeau, who led the discussion, pointed to climate change (or, at least, its associated urgencies) as a new threshold for cooperative development. On one level, it makes sense that green technology would be community-owned — as local communities will be best able to know which renewable energy resources are best suited to their area, and (as we saw with electrical utilities during the early 20th Century) some also may be on their own when it comes to actually making long-term investments that private business won’t. That said, we also saw plenty of evidence to suggest that cooperatives struggle, too, with the same short-term prejudices; caring about the environment is built into their codified principles, but we’ll need a lot of innovation to fully take advantage of the coming shifts (voluntary or otherwise) toward green energy.

Nadeau also pointed to social services as a great frontier for cooperative development. (“On a scale of 1 to 10 of cooperative development in social services, we’re like a 2.”) We heard one inspiring presentation from a doctor who’d recently banded together with his fellow providers to form the country’s first cooperative mental health care clinic (Centerpoint). His story was, basically, a saga of revelation and catharsis (facing downsizing from their hospital, the providers realized that they could and should just run their own clinic!) but it was also only a year old, and the signs of weariness were already detectable in his story; what will come of Centerpoint as the challenges of managing a clinic while providing care continue to grind at its doctors?

Meanwhile, I also see a whole realm of cooperative potential in the world of technology — from the design and manufacturing of equipment to the ownership of the “big pipes” that channel data from your house to the internet and back. Owning our own means of communication can be just as transformative today as electricity was a hundred years ago — and the lessons learned then may be directly applicable now. [[More on this here.]]

If more viable solutions like these can emerge, and we find ways to propagate them, the potential benefits are huge. Education, eldercare, childcare, art: these are all increasingly profit-centers for private capital, and not coincidentally we face crises in each — and those crises don’t just amount to matters of high price and product quality. We see here a great deleterious wave, in which corporations and non-profit organizations (which are, remember, just as undemocratic and unaccountable as corporations) increasingly assume the role of work that was done previously within a non-market realm — the public, the family, the social economy.iii Right when we’re approaching various thresholds of the limits of the natural world that powers this stupendous economic growth, our capacities as individuals who can work together to solve problems are facing oblivion.

To some degree, this is a legal challenge. We need financial and regulatory mechanisms that promote cooperation and local ownership; for the foreseeable future, such changes may be most plausible to imagine happening on a local level.

But I also wonder whether the cooperative development model’s relentless focus on up-front market viability (as principled and economically sound as this may be on its own terms) might miss some important perspective. In the disciplined delineation between need and demand, what gets left off the table? What about the resources within a community that are hard to monetize, difficult to market — what about the potential values that have yet to be realized? Can we, as cooperative developers, afford to ignore those needs and values? What if some powerful demands can only be articulated after certain needs have been met?

Recalling Ben Franklin and his fire insurance mutual: if I’m reading that history right, it seems like the organization of the fire insurance cooperative was only made possible by the organization of commonly-applied means to fight fire in the first place. Franklin created a fire squad that fought for the entire community, without expecting every resident to pay for it. Only after this, once everyone was already guaranteed protection in the event of a fire, do we see the emergence of cooperative insurance enterprise — because once the collective action problem had been solved, there was now a demand for property insurance among individuals. Could the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire have been viable in a community that hadn’t yet protected itself against the threat of mass conflagration?

Likewise, can the potential of cooperative enterprise ever be fully realized without simultaneous advances in commons governance? Can widespread cooperative emergence ever happen in low-income communities without the development of co-productive (i.e. partially or entirely non-capitalized) labor practices?

I left the CooperationWorks! training exhausted, challenged, and inspired — but also wondering about what kinds of conversations would emerge from a table where cooperative developers sat alongside labor organizers, Agile engineers, network weavers, time-bankers, and others thinking about how to build shared power with or without a business plan. Anyway, I left hopeful for the future. Let’s get to work!


Thanks to CooperationWorks! for a great training, and thanks to Co.Bank and the Ralph K Morris Foundation for the financial support that made it possible for me to attend.

13. December 2013 by
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