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Cooperatives Over Corporations
We're being told by today's High Priests of Conventional Wisdom that everyone and everything in our economic cosmos necessarily revolves around one dazzling star: the corporation.
This heavenly institution, the HPCW explain, has such financial and political mass that it is the optimal force for organizing and directing our society's economic affairs, including the terms of employment and production. While other forces are in play (workers, consumers, the environment, communities and so forth), they are subordinate to the superior gravitational pull of the corporate order. Profits, executive equanimity and a healthy Wall Street pulse rate are naturally the economy's foremost concerns.
How nice. For the wealthy few. Not nice for the rest of us, though. We're presently seeing the effect of this enthronement of self-serving corporate elites. Millions of Americans are out of work, underemployed and tumbling from the middle class down toward poverty. Yet excessively paid and pampered CEOs (recently rebranded as "job creators" by fawning GOP politicians) are idly sitting on some $2 trillion in cash, refusing to put that enormous pile of money to work on job creation.
The Powers That Be keep us tethered to this unjust system of plutocratic rule only by constantly ballyhooing it as a divine perpetual wealth machine that showers manna on America. Any tampering with the hierarchical control of the finely tuned machinery of trickle-down corporate capitalism, they warn, will cause a collapse and crush American prosperity.
Ha! Prosperity for whom? The corporate order itself has come crashing down on the prosperity of America's workaday majority — and the people are no longer fooled about the system's "divinity." From the Wisconsin rebellion to the outing of the Koch brothers' efforts to impose their plutocratic regime on us, from the Occupy movement to the spreading grassroots campaign to get corporate cash out of our elections, we commoners have finally peeked behind the curtain to see the fraud being perpetrated by the wizards of wealth inequality.
Yet, tightly clutching their wealth, the wizards retort that the only alternative is the hellish horror of government control, screeching "socialist" at all critics to scare off any real change.
But wait. The choices for our country's rising forces of economic and political democracy are not limited to corporate or government control. There's another, much better way of organizing America's economic strength: The Cooperative Way.
Cooperatives can (and do) provide a deeply democratic, locally controlled, highly productive, efficient percolate up capitalism.
Co-ops are wholly in step with the values, character, spirit and history of the American people.
While socialism has been cast by the corporatists as a destroyer of our sainted free-enterprise system, the cooperative approach is not an -ism at all, but a democratic structure that literally frees the enterprise of the great majority of Americans — which is why the co-op movement is fast spreading throughout our country.
While it's rarely mentioned by the conventional media, completely missing in the political discourse, not considered by economic planners and chambers of commerce and not known by most of the public, there are 30,000 cooperatives in America (with 73,000 places of business). A 2009 survey by the University of Wisconsin's Center for Cooperatives (www.uwcc.wisc.edu) found that these energetic enterprises have 130 million members, registering $653 billion in sales and employing more than 2 million people.
There are several types of co-ops, including those owned by workers (there are 11,000 of these, with 13 million worker-owners). Also, there are cooperatives owned by consumers, producers, local businesses, artists and communities, as well as hybrids of those categories. They function in every sector of our economy — manufacturing, health care, transportation, banking, farming and food, media, massage, child care, funeral services, interpreting and translating services, advertising, home building, high tech, engineering, energy ... and even a strip club in San Francisco.
Co-op businesses do everything that a corporation can do, but with a democratic structure, an equitable sharing of income and a commitment to the common good of the community and future generations.
You might be surprised to learn that such national brand names as ACE Hardware, Best Western Hotels, Organic Valley, REI and True Value Hardware are organized as co-ops, rather than as corporations. The strength of the movement, however, is in the limitless number of local cooperatives flowering all across the country. From Union Cab of Madison (http://www.unioncab.com/) to KOOP Radio in Austin (http://www.koop.org/), from Evergreen Cooperatives in Cleveland (www.evergreencoop.com) to Circle Pines Center in Michigan (www.circlepinescenter.org), citizen co-ops are highly prized for their unique personalities, human scale, democratic values and community focus.
Cooperatives are a big, structural reform that ordinary Americans can implement right where they live, giving small groups a pragmatic and effective way to push back against the arrogance and avarice of the centralized, hierarchical corporate model. Not only do co-ops work economically, they also make people important again, offering real democratic participation and putting some "unity" back in "community."
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22 Comments so far
Show AllJim, another great article. Thank You
I would like to draw peoples attention to an example of a huge cooperative that started in the basque region of spain now functions in several countries. That is Mondragon Cooperativa http://www.mondragon-corporation.com/language/en-US/ENG.aspx . Google for a lot of articles.
First and most important it has it's own bank which is involved in making sure an enterprise succeeds, even to reducing interest to 0.
The ratio of highest pay to lowest is about 5.5 to 1
It has its own university and technical colleges
It is controlled largely by the social committee composed of a variety of members
I could go on for a long time about Mondragon but if anyone is interested there is a lot of information on the net. Go look.
I would love to visit Mondragon at some point and introduce them to a healthy way of eating i.e. making their own tempeh.
www.makethebesttempeh.org I have tried connecting with them directly and also through the United Steel Workers who are partnering with them to clean up "brown" fields, etc.
We believe in small worker owned coops producing a healthy food for the local community. We are currently working on a small appliance that could make it all happen since we are called the tempeh pioneers.
Betsy Shipley
Right on, really curious!
Rainbow stew.....
When the world wide war is over and done,
And the dream of peace comes true.
We'll all be drinkin' free bubble-up,
Eatin' that rainbow stew.
When they find out how to burn water,
And the gasoline car is gone.
When an airplane flies without any fuel,
And the sunlight heats our home.
One of these days when the air clears up,
And the sun comes shinin' through.
We'll all be drinkin' free bubble-up,
An' eatin' that rainbow stew.
When a President goes through the White House door,
An' does what he says he'll do.
We'll all be drinkin' free bubble-up,
Eatin' that rainbow stew.
Great article, Jim!
I'll add a few successful worker cooperatives in the San Francisco Bay Area that I patronize.
www.arizmendibakery.org , www.rainbowgrocery.org (my favorite health food store of all time), and www.nbawc.org (pronounced "no boss") which lists all the coops in the SF Bay Area.
Jim,
Co-ops are terrific. It's a shame every time a mutual insurance company de-mutualizes.
That being said, it's unlikely that companies currently engaged in destructive anti-social behavior are going to become co-ops. We have to focus on changing all corporations to eliminate their ability to intentionally and continually engage in behavior that destroys the public interest.
One way to move in this direction is to eliminate their constitutional rights. However, I doubt this alone will not result in companies changing their destructive ways.
The corporation itself has to be changed to ensure that when it is found to be intentionally harming the environment or other elements of the public interest, it stops. It doesn't continue polluting, It doesn't go to Washington or our state capitols to lobby our elected representatives in order to be allowed to keep up its anti-social behavior. It simply stops. Until the design of the coproration is changed, corporate destruction of the public interest will continue.
Hey, I've got a great idea for a co-op. Let's get about 40 or 50 million of us to each kick in $200/month, and if any member of the co-op gets ill, needs to see a doctor, or an acupuncturist, or an herbalist, the co-op covers the cost, based on a balance between need and resource base, determined democratically by the members. We could hire a savvy executive, say Wendell Potter, to run the day-to-day operations, bargain for the best deals on care and drugs, and watch with amusement while profit-driven insurance companies try to compete with a service which actually exists to serve its clients rather than serve itself.
I can even think of a snappy name for it, too: we could call it "The Public Option, Inc."
Good idea. Even brilliant, but don't you mean "Public Option Co-op"?
If the 40 or 50 million you are talking about actually had $200 to spare every month they would buy insurance.
You might need a tad more than that tho. In most countries with free(?) healthcare medical costs are about $3500/capita. So about $300 should cover it. Good luck....
Sorry, Kilroy, but trying to change the corporation is like trying to imagine Sanatorium as president, impossible. Having worked in coops before, and even been involved in the conversion of a corporation into a worker-owned coop (it didn't work) I can tell you the primary factor is the people. They are different than the workers. That is one of the main reasons that corporations stay in power--the workers are afraid to take control. The workers in the US, and in other countries as well, are working through lunch, staying plugged in with their smart phones, working crazy 50-70 hour weeks and being "reachable" at all hours, day and night, weekends and vacations because they are afraid of losing their slavery position. Until the workers remember they are people first and not employees, the corporations will rule.
I think you assume I am advocating turning all corporations into co-ops. I am not. A business world populated only by co-ops will never happen and probably isn't even desirable. That's why I posted the comment above.
However, I do believe that corporations and their decision making processes can be changed by changing the laws under which corporations are designed. It is possible to impose on corporate managers obligations to the public interest that are superior to their obligations to the company and its shareholders. This can also be achieved without eliminating the profit motive. Indeed, there was a time in our country when this was the case--companies formed to pursue profit, but not at the expense of the public interest.
For more, check out Bob Hinkley's book on Amazon.com: "Time to Change Corporations.".
If workers bought their companies, could they turn these into co-ops? If not, could they at least let their unions exercise their voting priviledges, choose the executives, and thereby create an environment favoring themselves?
Jim...
A great piece of writing and so true - something I've been advocating for years.
The sticking point, though, is Wall St and all other stock exchanges around the world: how would you tackle all the investors and stock-holders? None of them will readily give up the lucrative seats they are sitting in, when you try to legislate all workers as profit sharing stake holders in every company.
There has to be a way, however, the satisfy current shareholders who, within a co-operative should continue to receive dividends but perhaps not voting rights.
Please keep up the pressure to change global thinking about the truly beneficial aspects of co-operatives. But please also use 'practical' instead of 'pragmatic' when praising the value of co-operatives. Pragmatic, unfortunately, conjures up an attitude that is philosophically valueless.
The whole notion of "stockholder" is the root of the problem. A cooperative is made up of worker-owners only for that is the only way for them to have sovereignity over their enterprise. Once you introduce a non-worker investor into the equation, the same short-term, greedy ethos (so characteristic of the corporation) takes over. Only the WORKER-owners can democratically decide the best course of actions for their company (and thus their workers) to thrive; they do not march to the drumbeat of myopic quarterly earnings or illusory, inflated stock valuations----the very things that only matter to elite speculators. This in short is what has happened to America in the last 30 years as the rapacious corporate monopoly dragons have destroyed an entire society. The real sick puppy (or elephant in the room) is Wall Street itself; the sooner we abolish it or "shrink it so we can drown it in the bathtub" (to borrow another from a parasite demagogue named Grover Norquist), the sooner we can rebuild this country with "true" values and economic justice (without which there cannot be democracy).
"The real sick puppy (or elephant in the room) is Wall Street itself; the sooner we abolish it or "shrink it so we can drown it in the bathtub" (to borrow another from a parasite demagogue named Grover Norquist), the sooner we can rebuild this country with "true" values and economic justice (without which there cannot be democracy)."
How?
By "re-localization," that is by rebuilding LOCAL, self-sustainable economies based on small businesses, craftsmen, artisans, etc. This is the only antidote to buying the highly unsustainable global products foisted on us by the monstrous mega-monopolies and big-box corporate retail model---that only benefits the quarterly stock earnings of the non-working elite investor class, by increasing their obscene profit margins at the expense of the worker's misery. It takes time to undo the destruction that has unrolled over 3 decades, but let's get started! Also, stop buying what you don't NEED; the best way to clarify this notion is to first throw away your TV set---the number one propaganda machine that turns every citizen into a non-stop consumer (and the indoctrination starts when a baby can look at a screen).
Secondly, don't "buy into" the stock market. Remember that all those 401K's that workers got pushed in only fattened the "pool" (think of poker) so that the 1% could get richer. Take your stock market shares and reinvest them into local businesses: there are so many micro-lending institutions where you can get a decent interest on your investments. In essence, you would become the true "job creator."
Lastly, don't fall for the "get rich quick" ethos---which is exactly what Wall Street and the real estate industries rely on to fatten the wallets at the top. The best and most moral (there's a lost word for you) way to earn money is to do so slowly and well. It is this IPO mentality that has destroyed this country over the last 30 years
and has promoted a dog-eat-dog, "as long as I have mine" greedy socio-economic model.
It's a very simple comparison. Compare the worker making the decisions versus a non-worker making the decisions. Ethically the former is absolute justice, the latter is absolute injustice.
Apply Kant's Categorical Imperative. If everyone were workers making decisions, the world is balanced and equitable. If everyone were non-workers making decisions, there are no workers, hence it breaks down, absolutely. I've found that applying KCI has never ever created a dilemma. It has ALWAYS indicated the best approach, by a very wide margin.
Further compare the workers making the decisions versus non-workers making decisions. If you look at human nature, the worker represents a sort of average of all people's agendas, and that average agenda is far more sustainable, just, honest, and efficient, than the agenda of the non-workers. So with workers making decisions, better agendas are supported, by a wide margin. Take a look into this. Let the destroyers bear the burden of proof.
If they frantically pursue the concentration of wealth, and yet refuse to bear the burden of proof, that indicates their bad intentions, doesn't it?
I can't imagine any lingering credibility for das kapitalists. Let's congratulate the people of the world for the incredible progress we've made past few years. Several years ago we had no idea how great of a position we would be in today, watching the elite dominoes fall so easily.
Workers' coops, credit unions, various structures enhance the pillar of the new world economy: The local economies of small independent farmers, craftsmen and merchants. Craftsman guilds and cottage industries.
Cooperatives. Damn good strategy. Unless the corporate government gets its congressional lackeys to create another law against the people. And that law is up held by the 5 neoconservatives riding in black on the scotus. This would be great for a think tank or tanks and a way better way to show the distance that exists between the 99% vs the 1% making those 1% groupies see the light when one day they find themselves on the outside of what they thought were their bosom buddies.
An economy within an economy within an economy. The other problem would be the 1% sending another 'bonus army'(shows the collusion of congress, the president and the miliary) hit squad out to move the cooperatives out of the way. Anything that will put the 'free capitalist global market' on the road to extinction. Here is a link to the original 20th century bonus army and pay attention to the big names involved, like patton, eisenhower, macarthur on the bad side and smedly butler on the good side:
http://en.wikipedia.org/wiki/Bonus_Army
Good idea jim that is going nowhere if only 20 comments indicates.
Worker Coops are more stable, have a higher survival rate, reinvest in the community, keep resources local, implement policies that are beneficial to the worker owners, implement best practices with regard to the environment (seeing as the workers families live there too), have little incentive to outsource, etc. etc. etc. There are endless structural reasons why they are better for the workers and the community (not to mention reasons of principle such as the right to have a say over your labor and its fruits). HOWEVER, it's not simply a Just Do It thing. Many dedicated people have put great efforts into building coops, and that's great. But in a nation of 200 million, getting "from here to there" is never just a matter of willpower. Right now the playing field is tipped in favor of corporate structures that benefit a small owner class. They get tax breaks, loan guarantees, investment incentives, and straight up subsidies and bailouts.
We need national economic policies that give a "preference for cooperatives". Even the famous Mondragon cooperatives, or the Italian coops of Emilia Romagna all started under policies (in Mondragon's case, a loophole) that were favorable to coops.
This is a political struggle. Many of us have spent many years of our lives showing how this model can work. 2012 is the year of the cooperative. It's time we move beyond "shop coop", to local, regional and national policies that favor them.