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Cooperatives enjoy success despite sour economy

At Slow Living Summit, panelists note the benefits — and resiliance — of the cooperative model

By way of disclosure and transparency, we note that reporter Isaac Nichols Baker, a Commons intern this summer, is the son of Lynn Benander, one of the panelists quoted in this story.

BRATTLEBORO—Coming in every shape, size, and flavor, co-ops arrived in force at the recent Slow Living Summit with a long but important message: they build communities, create good jobs, are democratically owned, and are more resilient than conventional businesses to the effects of economic recessions.

One of the many myths that cooperative presenters sought to dispel was the idea that co-ops are just another business model used primarily in the food industry.

Credit unions, green energy co-ops, electricity co-ops, fair-trade-coffee co-ops, farmer co-ops, and worker co-ops were all present or referred to by the day’s many speakers.

“[Co-ops] basically operate in every part of our economy; you name it, you can form it as a co-op,” asserted Erbin Crowell, local cooperative expert and current executive director for Neighboring Food Co-op Association, a Shelburne Falls, Mass., group that links food co-ops in the Northeast.

Speaking to the power and influence of co-ops in New England’s economy, Crowell said that “there’s about 1,400 co-ops in all sectors of the economy, with five million members and 22,000 people employed.”

He also stressed that the jobs that co-ops create often pay more than the national average. Crowell said that the average wage in a food co-op is 18 percent higher than the average in the food and beverage industry.

But beyond these impressive statistics, all the presenters focused their attention as well on the commitment to community building, and the ways in which the democratic principles at the heart of the cooperative model create real benefit for the world.

How, why co-ops work

John Restakis, author of Humanizing the Economy and longtime executive director of the British Columbia Co-op Association, defines a co-op as “any enterprise that is collectively owned and democratically controlled by its members for their mutual benefit.”

He and Crowell explained to an audience at the Latchis Theatre that the success of the co-operative model is written in the framework: what makes it unique is the fact that is it democratically controlled, in most cases, either by the consumer or the workers.

As a result of this distinction, co-ops are focused on “meeting needs instead of accumulating property,” Crowell said, adding that this distinction sets the cooperative model apart from capitalism and serves to empower communities instead of individuals at the top of a business hierarchy.

Crowell said co-ops are built upon “a circular relationship.”

“Your core stakeholders — the people who work there and the people who purchase the products — are the people who own the business,” he said.

Thus, the members are ultimately in charge and elect the people they want to run it and that profits are divided among all the workers, CEOs, and member-owners alike.

In putting the co-operative movement in a global perspective, Restakis said that there are now 800 million people in 84 countries who belong to co-ops.

He said that this figure represented a conservative estimate; groups like the International Co-operative Alliance put the number closer to 1 billion co-op members, or around 15 percent of the current world population.

All of the presenters at the summit gave the same statistic: co-ops around the world employ 100 million people, 20 percent more than all of multinational corporations combined.

Mondragon, the largest co-op in the world, is based in Spain. It has been the flagship co-op for others in the industry and has proved that democracy within the cooperative model is not limited by size and is still applicable for a company with as many as 85,000 member-workers.

Citing one of the alternative ways that Mondragon has chosen to cope with economic hardship in recent years, Crowell conveyed how co-ops can maintain the health and productivity of their community.

“Instead of laying people off, the workers voted to take an across-the-board pay cut and not lay anybody off, which is a very odd thing to do in a large multinational business operation with $21 billion in sales.”

He said that the thing that is exciting in a cooperative economy “is that it’s such a flexible approach.” When the workers choose what happens when jobs are on the line, instead of upper management, creative solutions become far more likely.

Lynn Benander, president and CEO of Co-op Power, a Massachusetts-based sustainable energy cooperative, said her cooperative “has doubled in size every year through the worst of the recession.”

“Because we’re not affected by speculative markets, we can continue to create real value in local communities regardless of what’s happening on Wall Street,” she said.

With enthusiasm mounting at the end of Crowell’s presentation, an audience member asked if Crowell thought that the cooperative model should be considered outright as an alternative to capitalism or socialism, and not just as a way of organizing a business.

After a moment’s pause, a smile broke out on his face.

“If you’re asking me, yes,” he said.

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Originally published in The Commons issue #156 (Wednesday, June 13, 2012).

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