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Why transforming the economy begins and ends with cooperation

Co-ops might not transform people, but the act of cooperation often does. 

Worker-owners of the CERO co-op with one of their zero-waste transport vehicles. Credit: Copyright 2016 CERO. All rights reserved.

“When I heard about the green economy for the first time, a light bulb went off in my head. We can create businesses and jobs for ourselves.” That’s how co-op worker-owner Tim Hall explains his initial spark of inspiration. Eventually he joined together with other unemployed Boston residents to found CERO (Cooperative Energy, Recycling, and Organics), an award-winning food waste pickup and diversion service. The name is fitting, since “CERO”—which means “zero” in Spanish—seamlessly blends their zero-waste mission with a green jobs strategy of workforce development among low-skilled workers, especially immigrants and people of color.

Cooperatives provide a sustainable and accountable way of providing goods and services—and they can help to transform our economies before it is too late. They promise a tantalizing future of sustainable social enterprise, community control, worker self-management and workplace democracy that places economic decision-making back into the hands of workers and consumers. Could co-ops dislodge capitalism and loosen its chokehold on what feels like every facet of our lives, or will they themselves become co-opted?

At some point in the last 50 years capitalism corralled the power to define everything about how we think about economics. That’s one of the benefits baked into being the dominant organizing force of the economy. But the bigger truth is that ‘the economy’ includes more than the profit-maximizing ethos of capitalism, just as ‘democracy’ isn’t the property of Congress or parliament. In democratic societies (at least in theory) we have elected and accountable representatives for everything from parent-teacher associations and children’s sports leagues to the general assemblies where members deliberate with each other in neighborhood associations and union halls.

The same is true for economics, where undemocratic, shareholder-controlled, profit-obsessed enterprises have come to be equated with the concept of business itself—and especially with commerce, money, mission and productivity. Cooperatives are for-profit businesses which operate in virtually every industry. They undergird global commerce, particularly in agriculture, energy, and local banking via credit unions, but instead of maximizing profits for their investors they are driven primarily by the interests of their members–– who may be producers on a farm, the residents of an apartment complex, the consumers of utilities and retail goods, or the workers in a factory. In co-ops the goal is to get a better price for farmers, more affordable housing for residents, higher-quality goods for consumers, and meaningful, healthy, fair-paying jobs for workers.

Is this inherently anti-capitalist? In a way, yes, because co-ops use capital to put people over profit, which inverts the profit-over-people logic of the current global economy. Worker cooperatives may be the most coherent alternative to capitalism as we know it because they put capital at the service of labor rather than the other way around. Some fall short of this ideal of course, and co-ops don’t guarantee social justice by themselves (which is why we still need social movements), but the co-op model inherently prioritizes the good of the many over the benefit of the few.

Generally speaking, the cooperative economy is better described as ‘a-capitalist’ rather than ‘anti-capitalist,’ because it can prosper in both market economies and socialist economies like Cuba, which currently has about the same number of worker co-ops as the United States. But in its desperation to legitimize and stabilize itself, capitalism is eager to co-opt at least the superficial characteristics of the cooperative economy, much as it has co-opted sustainable business through greenwashing campaigns over the last 20 years. Throughout the 20th century we have witnessed capitalism absorb cooperative elements into its structures in an attempt to reconstitute itself during its many crises.

At the same time, it’s disappointing but necessary to point out that some of the world’s largest cooperatives have managed to compete and survive against conventional businesses by mimicking the corporate cultures of late-capitalist firms. Who knew that American household brands like Land O’Lakes and Ocean Spray were both cooperatives? And when was the last time you were invited to vote in a general membership meeting of your credit union?

What’s more important than being ‘pro- ‘or ‘anti-capitalist’ is the recognition that cooperatives must figure heavily in any democratic, post-capitalist economy. This matters a great deal now, because while the contradictions and unsustainable nature of capitalism have become glaringly clear, many people struggle to articulate what will replace it. The exception is a rising consensus that cooperatives (along with small independent and family businesses) will replace the capitalist firm as the core non-governmental form of enterprise in the future. Cooperatives are an essential instrument of economic democracy.

But to succeed in this way, co-ops must stay true to the mission and guiding values. Employee-owned cooperatives force us to confront our own desire to do what it takes to live justly, sustainably, and in a participatory, people-centered way. They remove the excuse that the problem is the demands of the shareholder or the red-tape of government bureaucracy or the bullish will of a boss. When we have worker owned and controlled businesses, we must take responsibility for how well we pay ourselves, how connected our businesses are to the community and its needs, and how healthy our own workloads and quality of life truly are.

For as long as cooperatives fight to persist in a ravenous capitalist economy, these challenges will be greater, because a co-op’s products and services must rival the quality and price point of deceitful capitalist enterprises which cut corners on safety and the environment, and steal wages from workers in order to maximize benefits for their shareholders. Cooperatives are put on trial time and again because people want to imbue them with some magical or mechanical power to resolve societal problems. In the current context (or perhaps any context) this is impossible, but they do have the potential to be healthy and restorative as in the case of CERO.

The lowest income people in Boston may be on the frontlines of environmental disaster in their city, but Hall and his colleagues have found a way for their communities to become protagonists in creating solutions. Cooperatives put folks like them at the center of the economy, which means that ordinary people can use the power of business to address their needs and guide how change happens, thus helping to fulfill the promise of a democratic economy—not just voting once or twice a year but coming together to solve problems every day. The real question is this: can we as people put our full weight behind a new economic paradigm that is inclusive, inter-dependent, anti-sexist, multi-racial, anti-imperialist and liberatory?

I’ve spent 20 years as an active member of many different types of cooperative in the US, including the intimate living spaces of over a dozen shared housing co-ops and handling the day-to-day business of two different worker-run cooperatives. What I can tell you is this: by themselves such co-ops aren’t going to save us, nor are they going to transform society. But co-ops are an especially effective tool for change. They leverage innovations from the capitalist era of enterprise and turn them into a positive force within the broader spheres of human relationships, responsible resource consumption, and transparent governance and accountability— typically while staying rooted locally and showing concern for the community.

Deep transformation happens at the level of human beings, who then bring their reorientation to the structures in which they participate. Cooperatives are a vehicle to catalyze that change, but they only yoke together the people in the pilot’s seat. What ultimately matters is the disposition of the pilots themselves. We are the ones that have to change.

However, what I’ve also seen during my decades in cooperative communities is that while co-ops might not transform people, the act of cooperation often does. Not overnight, and not evenly for everyone. But the more my co-workers and housemates participated in cooperative processes like facilities maintenance, financial planning, passing a health inspection or some other shared work or act of problem-solving, the more humility, trust, empathy, stewardship and solidarity we each expressed. The habits of hierarchical, capitalist behaviors receded like the tide as we practiced interdependence and cooperation.

What we need are more opportunities to practice, screw up and improve in this way. And with more practice, we can all develop the qualities required to work through conflict and manage operations sensibly and democratically. Cooperation is the key to a new economy.

About the author

Esteban Kelly is Executive Director of the US Federation of Worker Cooperatives. He is a founder and core trainer with AORTA, a worker co-op that supports organizations fighting for social justice and a solidarity economy through consulting. He has served on numerous boards including the Democracy At Work Institute and the National Cooperative Business Association (NCBA-CLUSA).


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