A cooperative (also co-operative and co-op) is an autonomous, non-governmental association voluntarily formed to meet its members’ economic, social, and/or cultural needs through a jointly-owned, democratically-controlled enterprise.
Cooperatives are created by pooling or mixing interests, properties or labors. Members “throw in their lot” with other members who do the same, with a view to realizing benefits impossible by action ad seriatim. Such benefits may include economies of scale, increases in productivity, retention of profits by workers or the comradeship of coordinated group action. A cooperative is distinguished from a capitalist enterprise by its egalitarian structure its goal, and its status. It is owned not by outside investors but by its members, one-member-one-vote. Its goal is the mutual benefit of members themselves, with the result that if a co-op is for-profit, profit is a means only, not an end, and such profit may be sacrificed, e.g. in exchange for free time. Co-ops are autonomous with regard to states, though they are typically socially-owned in undivided shares and serve a public good.
TYPES & GROUPINGS
Any economic activity can be conducted on the cooperative model. Cooperatives may be generally classified as consumer, worker, producer, credit or marketing cooperatives -- or by sector. Traditionally cooperatives have been divided into economic sectors of agriculture, banking and credit, consumer, fisheries, housing, insurance, and workers' co-operatives. Each of those eight sectors has its own global organization whose members are the corresponding national associations, and in turn their members are the individual co-ops of those types in the various countries. (A distinction is made between producer and worker cooperatives inasmuch as large corporations may join together in producer co-ops -- Welch’s and Ocean Spray are United States cases -- without practicing workplace democracy.)
Uniting these eight global organizations of cooperatives is the International Cooperative Alliance (ICA), in Geneva, a UN-recognized consultative NGO linked to the UN’s International Labor Organization. But cooperativism is expanding. It permeates many other activities, from car-sharing and child/elder-care, to health care, home and hospice care, funeral services, computer consultancies, orchestras, schools, tourism, utilities (electricity, water, gas, etc.), transport (taxis, buses, etc), and more.
Because of their distinctive property form, neither entirely private nor entirely public, cooperatives are said to be part of a “third sector” or “social economy” (sometimes: “social and solidarity economy”). Grouped under the latter are 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.
CURRENT STATUS & POSSIBILITIES
With 800 million members world-wide, co-ops are major economic actors. They provide 100 million of the planet’s jobs, 20?ore than multinational enterprises! The ICA reports that in the most cooperativized continent, Europe, over 140 million are members of co-ops of all kinds. Over 10?f France’s employees work in co-ops - not extreme in western Europe. Surprisingly, in the US, as National Co-operative Business Association reports, co-ops of all kinds serve some 120 million members or 4 in 10 citizens. Included are: 10,000 credit unions, 1000 rural electric, 1000 mutual insurance companies, 6,400 housing, 3,400 farm, 270 telephone, and about 300 worker co-ops (a small percent compared to Europe). Worker co-ops are most frequent in Venezuela and Argentina, credit unions in Mexico, agricultural co-ops in Cuba and Brazil.
Since democratizing production can transform an economy, worker co-ops have attracted social change advocates. Surprisingly, most comparative studies show them to be more productive and profitable than similar capitalist firms. Given this pivotal advantage, a cooperative sector, not just the odd co-op or even co-op network, could out-compete traditional firms on their own criteria. Varied explanations have been offered for this advantage. It may be due to owner-members’ stakes in its success. And the pooling of knowledge that would otherwise go unshared may be important. Finally, worker co-ops, freed of the burden of costly managers and absentee shareholders, enjoy financial buoyancy and more options. Instead of being hired by capital for its ends workers would voluntarily join together to hire capital for their ends. If the current economic crisis matures, this taming of markets and narrowing of the wealth gap would bring welcome global economic security and balance.
Based on the premise that cooperatives are public goods – stimulating production and stabilizing demand - measures that would foster growth of a co-op sector in the U.S., for example, might include: community economic development (with neighborhood control of major pieces of municipal and county budgets); tax breaks and priority in government contracts; publicly funded co-op market research; establishment of revolving loan funds for cooperatives; widespread education in cooperative management and accounting; and letting workers themselves use their retirement funds for major buy-outs. Workers empowered in these ways would likely insist on democratizing not only production and investment but also distribution, yielding a viable cooperativized economy. Arguably, the weak effort in that direction made by the former Yugoslavia does not suffice as a counter-example, as we indicate below. Enterprise by enterprise the market in human labor would be abolished and collective decisions would displace “market forces.”
The cooperative movement - born along with and within capitalism as its built-in but radically opposite smaller twin - has for at least 160 years presented itself as an alternative to the dominant system’s antagonistic relations of production. 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 inform the modern movement. Of the following 7 principles of cooperativism, agreed to in 1995 by representatives of the global movement, four were initiated at Rochdale. Numbers one, two, three and five of today’s principles hark back to Rochdale: 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. They sold food items workers could not otherwise afford. In the four months prior to opening 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, selection expanded to include tea and tobacco, and the co-op became known for providing affordable, unadulterated goods. When, to raise more capital, the Rochdale workers took on non-worker investor members, the new members outvoted the pioneers and set up a standard capitalist enterprise -- a trajectory that was to become all too common in future cooperatives.
Subsequent co-op history is a discontinuous tale of sudden upsurges and equally sudden collapses, followed by forgetting. By 1848 it was clear that capitalism could not deliver on humanistic claims of the French and U.S. revolutions. In that year of the first serious protests in Europe against capitalism as such, cooperativism as alternative often figured prominently. And again, in 1871, co-ops of all sorts flourished briefly under the Paris Commune before it was brutally repressed by the French army. Later, in France in May 1968, the re-discovered idea of “self-management” swept through the economy, democratizing factories, apartment blocs, even corporate offices. As the ferment of debate permeated occupied businesses radical change in a developed nation seemed possible. Opposed by the De Gaulle government and subverted by the Communist Party, however, the 1968 uprising was reduced to being yet another flash in the pan. In 1974 workers in the occupation strike at the Lip watch factory at Besançon, France re-started production under “self-management” and began selling their products – an important innovation over the 1968 struggle.
Starting with Rochdale itself, the cooperative movement has been consistently dogged by what has been called “the degeneration problem”: re-absorption of co-ops by capitalism. solved Part of that problem - vulnerability to buy-outs – was largely solved by the “individual capital accounts” invented in the 1950s by the Mondragón Cooperative Corporation in Spain’s Basque country. The Mondragón network became a movement model by demonstrating that a major producer of capital goods could go up against capitalist firms and prosper. However, MCCs choices to enter first the European and later the global markets resulted in centralization of management and sacrifice of much of the democracy that had distinguished it from its capitalist competitors. At the same time however, a long-term democratization of production in capitalism itself may reflect investors’ growing difficult
Answered By: jwishz - 7/30/2008