Cooperatives are created by a pooling or mixing of economic interests or labors. Members "throw in their lot" with others who do the same, with a view to realizing certain benefits impossible by action ad seriatim - such as economies of scale, increases in productivity, or retention of profits by workers. A cooperative is distinguished from a capitalist enterprise by its egalitarian structure, its goal, and its status: its goal is the mutual benefit of members, with the result that if a co-op is for-profit, it is as a means only, not as end. Equally, cooperatives are autonomous with regard to states, even though they are typically socially-owned in undivided shares. --------- Betsy Bowman
Entry by Elizabeth A. Bowman on COOPERATIVES for Encyclopedia of > Activism and Social Justice, ed. Gary L. Anderson & Kathryn G. Herr, a SAGE reference publication. 1,000 word limit.
A cooperative (also co-operative and co-op) is an autonomous association voluntarily formed to meet its members’ economic, social, and cultural needs through a jointly-owned, democratically-controlled enterprise.
Cooperatives are created by a pooling or mixing of economic interests or labors. Members “throw in their lot” with others who do the same, with a view to realizing certain benefits impossible by action ad seriatim -- such as economies of scale, increases in productivity, or retention of profits by workers. A cooperative is distinguished from a capitalist enterprise by its egalitarian structure, its goal, and its status: its goal is the mutual benefit of members, with the result that if a co-op is for-profit, it is as a means only, not as end. Equally, cooperatives are autonomous with regard to states, even though they are typically socially-owned in undivided shares.
Because of their distinctive property form, neither private nor public, cooperatives are said to be part of a “third sector” or “social economy” (sometimes “social and solidarity economy”). Under the latter category are grouped other democratic economic practices such as fair trade, social currencies, and credit unions. Advocates of cooperatives and the social economy divide between those who see in them complements to capitalism or replacements for it. At the World Social Forum held in Caracas in January 2006 under the slogan “Another world is possible,” over a third of all sessions were devoted to cooperatives and the social economy, mostly as replacements for capitalism.
As for producer co-ops, most comparative studies show them to be more productive and profitable than similar capitalist firms. Thus a cooperative sector, not just the odd co-op or co-op network, might out-compete and replace traditional firms. A co-ops’ advantage may be due to the stakes all of its owner-members have in its success, or, or to its pooling of knowledge otherwise unshared, or, in a producer co-op, to its freedom from the burden of costly managers and absentee shareholders, In a cooperativized economy, instead of capital hiring and bringing workers together, workers first voluntarily join together and then hire capital for their ends, thereby abolishing the market in human labor.
Any business activity can be run on the cooperative model. Cooperatives may be generally classified either as consumer or producer co-ops, or by sector. They exist in the traditional economic sectors of agriculture, banking and credit, consumer, fisheries, housing, insurance, travel, and production (workers' co-operatives). Each of those eight sectors has its own global organization whose members are the corresponding national associations individual co-ops of these types in their country. Uniting these eight global organizations is the International Cooperative Alliance (ICA), headquartered in Geneva, a UN-recognized consultative NGO linked to the UN’s International Labor Organization. But cooperativism currently permeates many other activities, including car-sharing child and elder-care, health care, funeral, computer consultants, orchestras, schools, sports, tourism, utilities (electricity, water, gas, etc.), and transport (taxis, buses, etc).
Cooperatives are major economic actors. Over 800 million people are members of a co-operative world-wide. Co-operatives provide 100 million jobs worldwide, 20% more than multinational enterprises. In Europe, the most cooperativized continent, there are 140 million members of co-operatives of all kinds, according to the ICA. In France, typical of several other Western European nations, 10% of all employment is in cooperatives. In the US, the National Co-operative Business Association reports that co-ops of all kinds serve some 120 million members, or 4 in 10 US citizens, including: 10,000 credit unions, 1000 rural electric co-ops, 1000 mutual insurance companies, 6,400 housing co-ops, 3,400 farmer co-ops, 270 telephone co-ops, and about 300 worker co-ops. In Venezuela and Argentina, worker cooperatives are the most frequently encountered type, in Mexico credit unions, in Cuba and Brazil agricultural co-ops.
Born within capitalism as its own built-in Other, the cooperative movement has presented itself as an alternative to the exploitative economic relationships demanded by capitalism. While the utopian community set up by Robert Owen preceded the Rochdale Society of Equitable Pioneers founded in England in 1844, Rochdale is usually considered the first successful co-operative enterprise. Its principles are certainly the basis for the modern movement. Of the following seven principles of cooperativism, agreed to in 1995 by representatives of the global movement, four were initiated at Rochdale, that is, numbers one, two, three and five: 1.voluntary and open membership; 2.democratic member control; 3.member economic participation.; 4.autonomy and independence; 5.education, training, and information; 6.cooperation among cooperatives; 7.concern for community.
As mechanization was increasingly forcing skilled workers into poverty, a group of 28 weavers and other Rochdale artisans opened their own store in December 1844 selling food items they could not otherwise afford. Over the previous four months they had struggled to pool together one pound sterling per person for a total of 28 pounds of capital. The store opened with a meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing affordable, high quality, unadulterated goods. In a trajectory that was to become all too common, when, to raise more capital, they took on non-worker members, the new members outvoted the pioneers and set up a standard capitalist enterprise.
The subsequent history of co-ops is characterized by sudden upsurges followed by equally sudden collapses. In 1848 cooperativism as alternative was often behind the first popular protests against capitalism all over Europe. Then co-ops of all sorts flourished under the Paris Commune of 1871. And in France in May 1968 the idea of self-management swept through the entire economy, temporarily democratizing not just factories but apartment blocs, corporate offices, and the like, showing the possibility of radical change in a developed nation. Opposed by the De Gaulle government and massively subverted by the Communist Party, 1968 also proved to be a flash in the pan..
A new wave of cooperativism has arisen in Latin America in response to effects of neo-liberal globalization policies initiated in the 1980s. In Mexico, starting in 1994, the Zapatistas have developed a network of agricultural cooperatives or “communities in struggle” in the southern state of Chiapas aimed at a regional economic autonomy that can both survive and replace globalization. Since roughly 2001, the wave of workplace democracy hit Argentina, Uruguay, and Brazil. Since 2003, an even more sudden expansion, resulting in a cooperative sector, has taken place in Venezuela, with government encouragement. Abstaining from expropriation, the government is hoping that the greater productivity of co-ops will outstrip Venezuela’s still-dominant capitalist sector, attracting mass defection from it. Where enterprises were merely occupied in France in 1968, the factories and lands occupied in the new wave -- almost all bankrupt, closed, or fallow -- have been made co-ops by their workforces, who proceeded to re-start production and self-supporting sales. This advances cooperativization to a new level in the struggle for economic democracy.
There are risks facing the project of starting within capitalism and transforming it by a process of non-violent cooperativization into something better. First, co-ops can develop “enterprise consciousness,” putting themselves first and losing sight of their solidarity with workers in the same sector, thus becoming unworthy as models of a new, post-capitalist order. Second, if ownership is by divisible stock shares, the co-op’s greater productivity can so increase a share’s value that the original cooperators will have strong incentives to sell out. But these two dangers are mere versions of the overall risk of being re-assimilated into capitalism, which has dogged all experiments in cooperativism from Rochdale to the astonishingly successful Mondragon Cooperative Corporation in Spain’s Basque country, which is in process of being re-assimilated..
There are counter-strategies: first, begin with disciplined organizers whose goal is economic democracy, and with strong unionism to maintain class solidarity in and across sectors; second, use another instrument of ownership besides the stock share, such as the unexchangeable capital accounts developed at Mondragon; and third, make cooperativization at some point a government-supported project of transcending capitalism, lending workforces the cash for buy-outs of capitalist firms, or start-ups of new cooperatives, and extending tax breaks and preferential contracts to co-ops.
Unlike past attempts to build “another world,” this one has no guarantee that history is on its side. Only individual decisions on a mass scale can determine that.
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"In economic life there is extreme inequality and exploitation. Although colonialism no longer exists openly in the political and economic sphere, still it persists indirectly, and this should not be tolerated... In this respect you should remember that in economic life, we will have to guarantee the minimum requirements of life to one and all... There cannot be any sort of adjustment as far as this point is concerned. The minimum purchasing requirement must be guaranteed to all. Today these fundamental essentialities are not being guaranteed. Rather, people are being guided by deceptive economic ideas like outdated Marxism, which has proven ineffective in practical life and has not been successfully implemented in any corner of the world. Why do people still believe in such a theory, which has never been proved successful? The time has come for people to make a proper assessment of whether they are being misguided or not." |
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"Human beings have still not been able to form a human society, and have still not learned to move with the spirit of a pilgrim. Although many small groups, motivated by self-interest, work together in particular situations, not even a small fraction of their work is done with a broader social motive. By strict definition, shall we have to declare that each small family unit is a society in itself? If going ahead in mutual adjustment only out of narrow self-interest or momentary self-seeking is called society, then in such a society, no provision can be made for the disabled, the diseased or the helpless, because in most cases nobody can benefit from them in any way... in that case there always remains the possibility of some people getting isolated from the collective. All human beings must attach themselves to others by the common bond of love and march forward hand in hand; then only will I proclaim it a society." |