In the wake of a global recession that continues to devastate communities and livelihoods, people are hungry for alternatives to corporate greed and stock market speculation. As we look at challenges such as climate change, unemployment and growing disparities of wealth and ownership, many of us feel discouraged and unsure of how we can make business more accountable to our communities and our visions for more just, sustainable, and resilient economies.
As we seek to build a better world, wouldn’t it be great if we had a business model that was democratic, based on the principle of “one person, one vote” rather than “one dollar, one vote”? What if it was also rooted in our communities, owned by the people who use its products or services and depend on it for a livelihood? What if it was values-based, designed to put the common good before private gain? And would it be asking too much for this business model to be resilient in times of economic crisis, preserving local jobs and infrastructure?
Of course, these are not new questions. As in our own time, the 1800s saw dramatic shifts in the global economy, characterized by staggering shifts in wealth, concentration of wealth and power, and severe unemployment. And, similarly, there was a search for alternatives that would enable people to have more control over their lives and communities.
For working people, a central challenge of the time was ensuring access to healthy, affordable food. In 1844, a small group of weavers, unionists, and democracy activists took matters into their own hands by founding a modest, community-owned grocery store in the North of England. Their Rochdale Society of Equitable Pioneers established a set of economic principles that changed the world.
Today, the co-operative movement is receiving renewed attention from the United Nations. Reflecting on the global recession and the threat it posed to international stability and poverty reduction, the UN recognized that co-ops offered a solution and declared 2012 the International Year of Co-operative. UN Secretary-General Ban Ki-moon puts it more simply: “Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”
So, what is a co-operative? Simply put, it is a business that is equitably owned and democratically controlled by its members for their common good, the good of the community and to accomplish a shared goal or purpose. In contrast to investor-driven business models, co-ops are driven by the needs and goals of their members, and guided by the common good. Any surplus left over at the end of the year is distributed among members, not according to their investment, but in proportion to their use of the business, or is reinvested in further development of the enterprise. And unlike non-profits, co-ops are owned by and accountable to their members.
Co-ops are also more common than one might think. The ICA estimates that about 1 billion people worldwide are members of co-ops — more than directly own stock in publicly traded corporations. Globally, more people are employed by co-ops than multinationals. Although more than one in four Americans are members of about 29,000 co-ops in the US, the co-operative business model is largely ignored by business schools and academic institutions.
Co-ops are not perfect. Like any democratic organization, co-ops must balance the sometimes conflicting needs and goals of their members. They also must survive in a competitive marketplace, which may involve compromises.
However, in our pursuit of a more just, democratic, and sustainable economy, co-ops may be our best bet. “Co-operatives are arguably the single most successful initiative for taking people out of poverty with dignity that the world has ever seen,” argues Dame Pauline Green, president of the ICA. “What’s more, it is a business model that puts people at the center of the economic model, rather than at its mercy!”
Taken together, co-ops bring some distinct strengths to efforts to build a thriving and resilient regional economy. For example, co-operative enterprises:
- are democratic, achieving scale without sacrificing local ownership and control.
- are difficult to move or buy-out, rooting business in the community
- are values-based, emphasizing the common good as opposed to private gain.
- are flexible and innovative and can be applied to almost any community need or goal.
- are resilient and have a low business failure rate compared to other business models.
For all of these reasons, co-ops strengthen our communities, contributing to more stable food systems, infrastructure, employment, and services. What’s more, they separate community wealth from the speculative markets that have shaken our global economy.
Co-ops are both a viable model of enterprise and concrete expressions of economic democracy, self-help, and social enterprise — a way of doing business that puts people and community first. In short, co-ops build a better world. And there are many ways to get involved in this vision for a more co-operative future.
Erbin Crowell is Executive Director of the Neighboring Food Co-op Association, a network of 30 food co-ops and start-ups in New England. He serves on the boards of the Co-operative Fund of New England and the National Co-operative Business Association.