We live in a world that puts profits over people.
Let’s be honest:
We live in an economic system and social system that worships money.
There’s actually nothing wrong with money or making money: it’s simply a tool.
In fact, we can learn to change our relationship with money and become wealthier in empowering and proactive ways.
The error comes with making money into our god. The error comes with dehumanization and just seeing people and nature as a path to more money.
The reduction of human beings and the natural world to products and commodities to be processed, bought, and sold is a toxic mindset.
When our mental frame starts seeing things only in terms of what we can “get,” from them, we have become seriously weakened.
Instead of absorbing the inherent worth of everything around us we just want to hit the “fast forward” button and get to the result.
Gimme, gimme, gimme!
This predatory mindset and the conditioning that accompanies it, tells us that we will gain everything if we just work harder, move faster and fight harder.
And let’s be honest:
In some cases on the individual level that’s true. Not everyone who’s rich got there by cheating or harming someone.
But on a systemic level, this mindset is what has led to the system we have today: a hamster wheel run by oligarchs and crony capitalists, exploiting workers and offshoring labor as a small elite class profits at the expense of nations and families.
When we follow the profit-first motive — even if we grab some scraps from it – in the end we usually find we’re sad and alone.
But not everyone is taking the bait.
And many communities are beginning to rework the way they do work. That’s where cooperative economics work: a system of shared ownership and solidarity.
Welcome to cooperative economics
Cooperative economics is an increasingly popular economic model that prioritizes collaboration over competition. It’s not really socialism or communism and it’s not really capitalism.
Cooperative economics is unique and it’s based on a new — actually very old — way of seeing work and value.
Communally: as something we’re all in together with a vested interest in mutual success.
And also locally: as smaller cooperative systems that don’t have to participate in the bigger dog-eat-dog game of the society around them.
“When a company is owned and operated by the people who use its products and services and who benefit from what the company has to offer, it’s known as a cooperative.”
Cooperative economics is about shared ownership and a shared stake in the outcome and productivity of an enterprise. It’s voluntary and puts workers and community health first.
Cooperatives are people-centered enterprises
As the International Cooperative Alliance notes:
“Cooperatives are people-centered enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations. Cooperatives bring people together in a democratic and equal way.
Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the ‘one member, one vote’ rule. Members share equal voting rights regardless of the amount of capital they put into the enterprise.”
Cooperative economics transcends current partisan politics as well.
It’s gaining ground on the left including in the racial justice movement and on the right in the agrarian conservative movement.
As Lo Alalay writes in Cooperative Economics 1010 and the revolutionary potential of redistributing resources:
“The Solidarity Economy puts people and the planet before private profits and power, and seeks to supplement globalization with community-based social safety nets.”
In addition to being a way for people of color in particular to build solidarity and self-sufficiency, Alalay sees cooperative economics as a game-changer for the future of energy, education and more.
“Worker control, collective ownership, and democratic decision-making structures are the foundation of the Solidarity Economy. Health, food, water, shelter, education, community, and energy are at the center of the Solidarity Economy as areas that need to be continuously replenished,” Alalay adds.
On the conservative side, organizations like the Bruderhof, the Mennonites, Amish, and even some Latter-day Saints communities have farming and economic cooperatives and welfare systems that ensure that competition and greed don’t outpace concern for the collective wellbeing of the community.
Here are 10 incredible examples of how cooperative economics is changing the way we live and work.
1) Retail cooperatives are changing how we shop
Retail cooperatives are still based on people buying goods, but instead of profiting a class of speculative investors, the profits go back to the consumers themselves.
Consumers pay a small membership fee and then get a stake in the company.
By having co-ownership of a store or business, cooperative retail allows people to vote on important decisions and have a real stake in the future of the company.
There are many successful retail cooperatives in various sectors from agriculture to hardware stores and grocery stores.
Examples of highly successful retail cooperatives include ACE Hardware, Carpet One, and NAPA Auto Parts.
2) Worker cooperatives are shifting the way we work
Members of worker cooperatives are employees and owners.
They no longer have a faceless corporate headquarters bossing them around: they and their peers are the boss.
Decisions are, in most cases, taken with the common good in mind and this has been used very effectively for new start-ups, entrepreneurial ventures, the agriculture sector, bakeries and restaurants.
An added bonus of worker cooperatives comes in the stock options with various companies offering Employee Stock Ownership Plans (ESOPs).
The Democracy at Work Institute writes:
“In contrast to traditional companies, workers at worker cooperatives participate in the profits, oversight, and often management of the organization using democratic practices. Workers own the majority of the equity in the business, and control the voting shares.
The model has proven to be an effective tool for creating and maintaining sustainable, dignified jobs; generating wealth; improving the quality of life of workers; and promoting community and local economic development, particularly for people who lack access to business ownership or even sustainable work options.”
3) Cooperatives are changing how we do business
Cooperatives are not just reserved for one or two areas of the economy. One of the best things about them is that with some attention to detail and industry specifics, they can be adapted to a wide range of situations and economic realities.
From coop grocery stores to insurance companies, the coop concept has stood the test of time because it largely works and also helps to lower costs and raise rewards.
Writing for The Cooperative Grocer Network, Adam Schwartz observes that co-ops exist in many areas with remarkable success:
“Cooperatives operate in all sectors of our economy including housing, finance (credit unions), energy, agriculture, insurance, worker-owned, child care, health and purchasing co-ops.”
4) Housing cooperatives are redefining our way of living
As human beings, one of the needs that all of us have is to obtain shelter of some kind.
As basic as that sounds, it’s a growing challenge for many people around the world, even in developed nations like the United States and Canada.
Having a home is far from a sure thing, and having a home that’s safe and provides your basic needs is also no guarantee for millions.
Housing cooperatives work to solve this by allowing people to share the costs of building or owning a home.
A group of people incorporate as a business and then jointly buy housing units, with conditions put on resale so that the venture doesn’t just attract carpetbaggers looking to make a quick buck.
There are many condominiums, rentals and single-family homes that use the cooperative model very successfully.
5) Cooperatives are influencing international politics
Cooperatives also have a growing voice in the international political arena.
The International Cooperative Alliance (ICA), for example, has a G20 working group that is working to build the reach and advocacy of cooperatives in order to influence and educate G20 leaders of the world’s most powerful nations.
Working to develop policy recommendations, the group is one example of how dedicated cooperative thought leaders are collaborating to emphasize the many benefits of cooperative economics including “increasing awareness about cooperatives with business leaders, resulting in a broader understanding of the role and importance of cooperatives as a fundamental actor in enhancing sustainable development.”
6) Innovative economic cooperatives exist in the Caribbean and West Africa
Various areas of the Caribbean and West Africa still use the susu system.
It’s a kind of cooperative banking model which is based on microfinance. The susus collectors set up booths where they are basically banks on the go.
They make loans to individuals and small businesses who have ventures and start-up ideas, keeping a tiny commission.
The Black American experience also has deep roots in cooperative economics, including organizations such as the Federation of Southern Cooperatives (FSC).
The FSC was started in 1967 in Atlanta, Georgia to support Black cooperatives throughout the South especially to get money for farming, fishing, crafting, starting shops and banking.
The FSC was very successful in increasing rates of Black land ownership and promoting sustainable agriculture. The FSC has over 200 cooperatives and credit unions in the South and it has a training center in Alabama that helps people develop youth cooperatives.
7) Cooperative economics are growing worldwide
One of the best things about cooperative economics is that the concept is growing on a global scale.
As authoritarian socialism and exploitative capitalism and black-market criminals face off in the geopolitical realm, many people are seeking an alternative that could actually work for working families and communities.
Cooperatives are far from some fringe economic theory, considering that “at least 12% of humanity is a cooperator of any of the 3 million cooperatives on earth,” as the ICA notes.
The ICA goes on to observe that:
“Cooperatives allow people to take control of their economic future and, because they are not owned by shareholders, the economic and social benefits of their activity stay in the communities where they are established. Profits generated are either reinvested in the enterprise or returned to the members.”
Think of how different this is from a Walmart or Target, which scalps off the spare dollars of communities it operates in and then throws the odd charity baseball game while sending the vast bulk of profits to its greedy shareholders, owners and foreign slave labor holding companies in China who supply its products.
8) Cooperative businesses are more successful than non-cooperatives
One of the best things about cooperative economics is that it works.
As Jessica Nembard notes for Grassroots Economic Organizing, cooperatives are remarkably successful:
“Cooperative businesses have lower failure rates than traditional corporations and small businesses, after the first year of startup, and after 5 years in business. About 10% of cooperatives fail after the first year while 60-80% of traditional businesses fail after the first year. After 5 years, 90% of cooperatives are still in business, while only 3 – 5% of traditional businesses are still operating after 5 years.
This is often because of the many people involved in starting a cooperative and the high level of community support for cooperatives (World Council of Credit Unions study in Williams 2007).”
9) Negative case study: Mountain Equipment Co-op (MEC)
For years, Canada’s Mountain Equipment Coop (MEC) has been a shining example of a retail cooperative that showed how it was done.
The coop was started in 1971 in Vancouver, Canada and its membership grew steadily as it offered excellent outdoor gear, hiking equipment, and camping supplies.
West Coasters loved it and so did a growing international base of consumers, eventually reaching its current roster of over five million members!
Paying just $5 Canadian dollars to join, customers loved the company including its lifetime money-back guarantee.
Sadly, the company was sold off in 2020 to a large US private equity firm, disappointing former staff, and members.
“It’s disappointing. When you work with MEC, you see the community they’ve created. To lose that sense of cooperation when it comes to loving the outdoors and protecting our wild spaces, it’s a blow,” said one former employee, while Toronto Star writer Shawn Micallef wrote that MEC had “lost their co-op roots somewhere along the way. Became a corporate run big box that chased something else.”
MEC is a great — and ironic — example of a coop that succeeded beyond its wildest dreams but lost sight of its roots in the process and allowed itself to get sucked back into the global capitalism game.
10) Positive case study: Mondragon
An excellent positive study is the Mondragon Corporation, which is located in Spain’s Basque region.
As the largest cooperative on the planet, Mondragon was founded in 1956 by José María Arizmendiarrieta and many of his students that he taught at college.
The first products that the Mondragon cooperative made were simple paraffin wax heaters.
It’s now the seventh-biggest company in Spain by assets and employs over 82,000 people in 257 different cooperative companies focused in the finance, industry, retail and knowledge economy.
Mondragon is a perfect example of making a profitable business enterprise that still puts people first and gives workers a vote in its corporate leadership – as well as decentralizing the leadership.
What can we learn from cooperative economics?
As we move forward into an uncertain future can cooperative economics be a model for a fairer and more effective economic system?
Or does it only work on a small scale and in specific contexts and industries?
The evidence all points to cooperative economics as a key plank of any platform that wants to improve the future of work.
As automation and machine learning continues to erase jobs forever, we need to find ways to work together and collaborate that put humans-first.
There is nothing wrong with these enterprises remaining profitable and profit-based, however if they can work with the principles of decentralization, worker democracy, co-ownership, and giving back to the local community then there is nothing we can’t achieve.