Means to Change: Co-ops

Posted: July 3, 2014 in Capitalism, Economics, Politics
Tags: , , , , , ,

(from The Anarchist Cookbook, by Keith McHenry with Chaz Bufe, Introduction by Chris Hedges, scheduled for October 2015)Anarchist Cookbook front cover

 

Both consumer and producer co-ops have a long history, dating back to at least the 19th century, when there were active co-op movements in both England and the U.S. The aims of those founding co-ops varied. The aims of some, especially consumer co-ops, were simply to reduce costs for their members. The aims of some producer co-ops were sometimes more ambitious: many founders and members of producers co-ops (and some members and founders of consumer co-ops) saw them as a means of transforming the economy into a federation of co-ops.

There are both internal and external reasons this transformation never took place. One can look to such matters as capitalization and economies of scale, but other factors were and are also at work.

Perhaps the most important of those factors is that co-ops exist in a capitalist economy, and they usually become co-opted; sooner or later they begin to act like typical capitalist businesses, distinguished only by ownership being spread out among their members rather than in the hands of individual owners or shareholders.

The wave of co-optation of food co-ops from the 1970s is a case in point. (I’m quite familiar with those co-ops, having worked off and on as a paid staffer at such a co-op for seven years.) Those who founded those food co-ops often had rosy visions of a cooperative economy gradually supplanting corporate capitalism.

Needless to say, that didn’t happen. Instead, the 1970s food co-ops that survived, for the most part, have evolved into high priced health food stores with an uninvolved membership and a traditional management structure. (The last I heard, the co-op where I worked had followed such a path, and had branched out into selling high end wines, with some bottles selling for several hundred dollars.) This isn’t the worst thing in the world, but it certainly falls short of revolutionary change.

Producer and service-provider co-ops can be both far better and far worse. At their absolute nadir, such co-ops can become simple vehicles for exploitation of nonmember workers. The taxi co-ops in many U.S. cities are a good (actually horrifying) example. Many have evolved to the point where the owner-drivers have become pure owners (and no longer drive), mercilessly exploiting non-owner drivers who often make less than minimum wage.

At best, producer and service-provider co-ops can and do operate along directly democratic, self-managed lines, and serve as models demonstrating that such an operating structure is viable. The rub is that such co-ops exist within the capitalist economy and are subject to the same relentless pressures as any other business.

One such problem is the pressure to expand (“Expand or die,” to quote a capitalist proverb). When co-ops do expand, they often hire nonmember workers, and this inevitably sets up a two-tier structure within their work force. Even when pay remains the same for members and nonmembers, nonmembers are normally the first ones fired when an individual co-op’s business worsens or the overall economy slumps. It’s also pertinent that nonmember workers are just as powerless over their jobs as unorganized workers in any other business.

As well, almost all co-ops above a certain small size adopt a traditional management structure. Some draw managers from their work forces and compensate management less lavishly than in typical corporations, but the fact remains that their workers are managed.

Another pressure on co-ops is that of keeping costs to the minimum, in order to keep their prices competitive. This pushes co-ops to buy from the cheapest sources possible, which often involves buying from suppliers who exploit labor and/or have dodgy environmental policies.

But within these limitations, co-ops can do good work. The example co-op advocates typically cite is the Mondragon Corporation, by far the largest and most successful co-op federation, which consists of 289 cooperatives worldwide with revenues last year of over $14 billion Euros (equivalent to about $19 billion).

Within Mondragon co-ops, top management earns only 3 to 9 times the wages of the lowest paid workers, and members own the co-ops. On the down side, not all workers are owners, competitive pressures to keep costs down are a constant, and there is still the traditional capitalist division between workers and management (even though managers are drawn from the work force in many co-ops and managers receive relatively modest compensation).

In other words, the co-op movement is reformist, not revolutionary. It will not and, by its very nature, cannot lead to fundamental change.

One very relevant piece of evidence that this is so is the origin of the Mondragon co-ops: they began in the 1950s in the Basque region of Spain, with the permission of Spain’s government, headed by mass-murdering fascist Francisco Franco. The Franco dictatorship ruthlessly suppressed all forms of dissent, and anything else it deemed even remotely threatening. And it allowed the Mondragon co-ops; it didn’t see them as a threat.

This is not to say that co-ops are useless. Far from it. Within their limits, they can bring significant benefits to their members. But they’re reformist, not revolutionary.

Even if it succeeded globally, the best the co-op movement could deliver would be “capitalism with a human face.”

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Comments
  1. Gregg Chmara says:

    Co-opting Co-ops does not have to be inevitable IF mandatory initiation and ongoing education of embers take place and are advantageous to them.

    One of the most egregious failings in the USA co-op market was the philosophical change that has taken place in the Credit Union market. Founded along the Canadian model of credit unions, service was limited to a field of membership known to have credibility AND members who earned credibility by meeting the terms set by local boards and credit committees of MEMBER SHAREHOLDERS.

    In a 30 year splurge of mergers and consolidations — the advent of professional executives from commercial banking changing the philosophy of the original organizations — and expansion of services based upon profitability, not direct member benefits (like $ for $ savings life insurance). Credit Unions now are more like banks than the original member service organization they were.

    And, rather than credibility and member credit history counting for creditworthiness along with knowledge of that member and the local market applied through loan committees and boards — the national credit services used by the big banks now rule all decisions. Purely number capitalism — and no spirit of co-op left.

    I have not checked how the Canadian system has faired in the same period, and whether it has remained a little more social and locally dynamic.

    Like

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