Talk to the Washtenaw Community Action Team on Building a Radical Co-op Movement

I was recently asked to present on co-ops to the Washtenaw Community Action Team. The night it presented the group was also attended by about 17 bikers with a group called Co-cycle, cooperative activists who are biking across the country to learn about co-ops, and in celebration of 2012 the year of the co-op. The cross-pollination between the Community Action Team and the Co-cyclers led to a lively discussion afterwards. Regrettably I don't have notes from that. Below are my notes from the talk, because I talked off of the text some and did not read it word for word, these notes are not exactly what I said, but they capture the basic points. 

First a disclaimer, while I am a board member of the Peoples Food Co-op my thoughts here are my own and do not represent the position of the board. 

2012 was recognized by the United Nations as the international year of the cooperative. I think this is a big deal and I hope that this discussion tonight can help do what the ICA, the International Cooperative Association hopes will emerge from the international year of the cooperative, that greater attention will be brought to the importance of cooperatives.

 What I'd like to do tonight is first address some theoretical and historical background regarding the place of co-ops in left strategy, then I’ll talk a bit about the scope of cooperatives and then a little bit about what is happening with co-ops in Michigan. Then I want to raise some issues that I think speaks to the limitations of cooperatives, then I'd like to return to theory and discuss cooperative values, and some important co-op vision, finally I'll suggest some the elements that I believe are important for building a radical co-op movement. In dialect terms that theory, practice , theory, praxis.

Progressives and specifically that segment of progressives who call themselves the anticapitalist left needs strategies and tactics for economic change. I think that questions of strategy and tactics are immensely important so I want to start by mentioning the main strategies that I believe have dominated left praxis at least in America, or at least through my lenses as an activist over the last 35 years. There is revolutionary politics that seeks to organize and educate, or trained for a potential revolutionary moment. There is unionism, direct organizing of workers to struggle against their bosses for better economic and working conditions. And then there are efforts at political reform. A fourth strategy is building cooperatives to provide direct ownership of the means of production, or systems of distribution, by workers and/or consumers. My friend Donald Roberts suggests that the first co-ops were organized by slaves in ancient Egypt as a way of survival in the context of their enslavement. With a nod to my Norwegian heritage I might like to find co-op roots in the cooperative villages of Scandinavia, on the other hand there's plenty about Viking marauders I want nothing to do with. Usually in English-speaking countries the Rochdale co-op is seen as they're beginning of the modern cooperative movement in 1844.  John Curl’s book “for all the people: uncovering the hidden history of cooperation cooperative movements and communalism in America “ demonstrates that cooperatives were alive in America before 1844, but more importantly his history shows how cooperative organizing went hand-in-hand with union organizing throughout the 1800s. Building a cooperative society based on cooperative institutions was in fact very much a part of revolutionary vision in early America. My take is that we have lost that vision and regaining it is an important task for building a successful left at our current point in historyMy opinion is that this fourth strategy is increasingly our best option for forwarding a progressive agenda, and unfortunately has often been overlooked by the left.

My friend Donald Roberts suggests that the first co-ops were organized by slaves in ancient Egypt as a way of survival in the context of their enslavement. With a nod to my Norwegian heritage I might like to findco-op roots in the cooperative villages of Scandinavia, on the other hand there's plenty about Viking marauders I want nothing to do with. Usually in English-speaking countries the Rochdale co-op is seen as the beginning of the modern cooperative movement in 1844.  John Curl’s book “for all the people: uncovering the hidden history of cooperation cooperative movements and communalism in America “ demonstrates that cooperatives were alive in America before 1844, but more importantly his history shows how cooperative organizing went hand-in-hand with union organizing throughout the 1800s. Building a cooperative society based on cooperative institutions was in fact very much a part of revolutionary vision in early America. My take is that we have lost that vision and regaining it is an important task for building a successful left at our current point in history

So where are we currently ?

The cooperative movement is really larger than most people realize. Let me share some quick statistics: worldwide there are over 1 billion co-op members , there are over 300 million co-op members in the United States. But counting membership can be misleading, I am probably counted at least three times. My bank, my insurance, my grocery store are all cooperatives. another way to look at Co-op membership in the U.S. is that 120 million individuals belong to at least one co-op or credit union. The 30,000 co-ops in America provide 2 million jobs.  Some cooperatives are owned by consumers, of the cooperatives are worker owned. There are only about 300 worker owned cooperatives in the United States. The largest of these workers cooperatives is a home healthcare cooperative with over 1000 worker owners. If we look beyond true worker cooperatives we see 1100 worker owned companies with around 13 million worker owners. This is the number I really want you to focus on 13 million worker owners. Now were talking about many people who are owners through employee stock ownership plans. Some ESOP companies as they're called are entirely owned by the workers, others are not. Nonetheless, 13 million workers is nearly twice the number of union workers in the private sector.  Credit unions are the co-ops in the world of finance.  There are over 7000 credit unions the United States with combined assets approaching 1 trillion. The occupy movement deserves credit for helping that grow. Last year with the campaign for people to leave the big banks.

Okay what about the state of cooperatives in Michigan?

Let's start with Ann Arbor and Washtenaw county, some of the easily identified coops include: The “HUD housing coops”: Colonial square, Arrowwood, Pine Lake, University Townhouses, & Forest hills then there is the student housing co-ops, The Inter-Cooperative Council, my own community co-op Hei Wa House,  in the food sector we have the Peoples Food Coop, and the Ypsilanti Food Coop, there is a new growers co-op in Ypsilanti, and the food hub may eventually be organizing as a cooperative. The campus group houses (co-ops, fraternities, and sororities)  have Student Buyers Association. The Community Farm of Ann Arbor is a community supported agriculture project that is organized as a co-op. The Potters Guild is a cooperative ceramic studio. There are about 5 local Nursery school Co-ops, Several Credit unions are active in our area, University of Michigan Credit Union, is perhaps the best known credit union in Ann Arbor, but Lake Trust Credit Union is open for membership from anyone living in Michigan.

The membership for food co-ops in Michigan numbers around 20,000 (this doesn’t include buyers clubs) I sit on the board of the peoples food co-op, and in many ways the peoples food co-op is very successful, our membership is considerably larger than other food co-ops in the state. Our sales are good and the storefront is a nexus for the local community. Let me put out an advertisement, we are looking for a new general manager, someone with retail business experience, good people skills, and at least a little bit of an ability to do “vision”.

 Although Detroit lost its main food co-op a couple of years back, there is at least one and maybe more efforts to start a food co-op in Detroit now.

Let me get away from numbers and lists, and talk about some interesting projects, there is a grassroots cooperative organizing network with for lack of consensus on a better name, is called, the latter-day society of equitable Pioneers. This group organized out a circle Pines is hoping to pump energy into the co-op movement by putting young activists together with co-op old-timers. I know at least one project that has spontaneously emerged from this cross-fertilization.

It's also through this organization that I learned about Deb Olson's work with the center for community-based enterprise and the Detroit community cooperative. The idea here is to build a network of workers cooperatives, and if I understand things correctly they have launched a business services cooperative, an organization that can provide resources such as marketing and accounting and so on for small co-op startups. Now they are launching Sew Detroit workers co-op, and I have had some conversations with one of their organizers about the possibility of a home healthcare workers cooperative

I should also mention that I have heard a number of co-op oriented activists in Ann Arbor speak about developing an Ann Arbor co-op business incubator,

I now want to take a look at Coops with our eyes wide open, I want to discuss some of the limitations of coops as a strategy for radical economic change.

First I want to point out that co-ops are really two different models of doing business. There is the consumer co-op model which tends to dominate cooperatives at least in this country, and then there is the worker co-op model. I believe that the latter tends to have much more radical potential, but represents a much smaller segment of the cooperative sector.

Then there is the issue of what we could call bosses coops: Land O Lakes butter, Ocean Spray,  True Value hardware, Ace hardware, best Western hotels, even some KFC franchises are all cooperatives, cooperatives of farm or business owners, the employees of these businesses are not part of the cooperative. Nonetheless, Ocean Spray is not Pepsi, our local True Value hardware store, Stadium Hardware is locally owned, Lowe's is not.

Then there is the problem of democracy, co-ops are democratically owned and run businesses, but making the democracy work can be a challenge. Even with our food co-op, with a little over 7000 members, it can be a challenge to even know what the will of the membership is. About 10% of the members participate in elections, and board members who are elected then create a framework for the general manager. The power of operations lie in the hands of the general manager. For the UM credit union, the board is elected and an annual meeting, and it is hard to imagine why your average credit union member would make an effort to get to that meeting. So much of what we call democracy in consumer co-ops might be better described as trusteeship. Still the presence of democratic mechanisms allows for democracy when situations arise where it is important.

Another issue: is that businesses fail. Co-ops are no exceptions. While it is true that co-ops are generally more resilient than other comparable businesses during economic downturns, co-ops can fail, taking community and/or worker resources with them.

A final concern I want to raise about cooperatives, is the lack of co-op driven political action. We all know that unions play a very important role in our political process. I think there may be a variety of reasons why we don't see similar engagement from cooperatives. This isn't to say co-ops never do anything political. For instance our food co-op is engaged with the campaign to label genetically engineered foods. But the scope of engagement is considerably less than what we see from unions, and, I would argue, considerably less than it should be.

Co-ops in theory stand for something, they are value based businesses. Many co-op members may be familiar with the co-op principles, but behind those principles stand co-op values. I have recently started to focus more on these values. The international organization for co-ops, the International Cooperative Association (ICA) identifies six co-op values: Self-help, Self-responsibility, Democracy, Equality, Equity, and Solidarity. I think that Self-help and Self-responsibility are particularly interesting because they are values that the right wing tends to try to claim as exclusively theirs. Beyond these values, which might be considered values for internal operation, the IAC also identifies four co-op ethics values, Honesty, Openness, Social responsibility and Caring for others.  It is out of these 10 values that the classic 7 co-op principles are articulated:

The following principles were adopted by the 1995 Centenary Congress of the International Co-operative Alliance (ICA). They reflect how the co-operative values are put into practice.

1. Voluntary and Open Membership: Co-operatives are voluntary organisations open to all persons who qualify for membership and are willing to accept the responsibilities of membership without gender, social, racial, political or religious discrimination.

2. Democratic Member Control: Co-operatives are democratic organisations controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to their members. In primary co-operatives members have equal voting rights (one member one vote) and co-operatives at other levels are also organised in a democratic manner.

3. Member Economic Participation: Members contribute equitably to, and control democratically, the capital of their co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion with their transactions with the co-operative; and supporting other activities as approved by membership.

4. Autonomy and Independence: Co-operatives are autonomous, self help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their

co-operative autonomy.

5. Education, Training and Information: Co-operatives provide education and training for their members, elected representatives, and employees so that they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.

6. Co-operation among Co-operators: Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

7. Concern for the Community: Co-operatives work for the sustainable development of their communities through policies approved by their members.

In the most exciting cooperative projects in the United States today, we can see vision of how to build an economy based on from cooperative values and principles.

Gar Alprovitz author of America beyond capitalism : reclaiming our wealth & and the director of the democracy collaborative argues that wealth is a more important target than income, and that we should focus on building community wealth, this includes more than cooperatives, land trusts, and other community institutions, but his big project has been the Evergreen cooperatives in Cleveland. These are a series of workers cooperatives aimed at employing low income people from Cleveland, and giving them not just a job, but a share in the workplace. Key to this project success has been its strategic ties to the Cleveland foundation, and what he calls anchor institutions, in this case hospitals and universities. So far three co-ops are up and running, a green laundry, a solar leasing company, and a urban greenhouse growing salad greens. Gar says he's trying to model these co-ops after the Mondragon co-op system in Spain.

The Mondragon cooperatives (MCC) in Spain's Basque country. MCC is a 50-year-old thriving and ongoing experiment in radical democracy consisting of some 120 worker-owned cooperatives involving nearly 100,000 workers and allied with another 130 allied coops in the region, with revenues in 2011 of some $24 billion. &$33.5 billion in assets

While were talking about Mondragon, Mondragon and USW are developing a project that promises to be far-reaching. They have worker co-op collective-bargaining model that they plan to roll out in their own series of co-ops, starting interestingly enough with a green laundry modeled after Cleveland's laundry co-op.

Deb Olson’s development of the Detroit community cooperative is another project with a similar vision, launching in linking workers cooperatives, in order to create jobs and a whole lot more. This project has over seven years of preparation going into it and just now it is beginning to flourish. I only met Deb once at a weekend at circle Pines, what was clear to me was that she was clearly a visionary.

Where else is there potential for cooperatives, let me just give you one idea, Solar energy cooperatives are being organized in a number of communities. In Cleveland we see a workers co-op model of the solar leasing company. There appears to a highly decentralized solar consumer co-op model emerging in the DC area. One way solar consumer co-op can work, is allowing individuals to get the benefits of solar power when their own homes don't have solar access, by buying panels collectively, and for instance, putting them on a public building, and then individuals receiving returns proportionate to their investment. There are also tax reasons why I think a co-op model for solar power makes a lot of sense (I hope I'm understanding the tax issues here correctly). One of the beauties of solar power is that it allows for total decentralization of energy production. I think there's a link between decentralization of energy, and decentralization of political power. Our present tax structure allows for corporations to depreciate the value of equipment, in this case solar panels, as a homeowner, I don't have the same ability to depreciate my appliances, in this case solar panels. If I'm not mistaken a co-op should allow me to own the equivalent to my panels in value, while at the same time benefiting fully from depreciation.

But perhaps as exciting as anything that has recently happened in the co-op movement was the call by the people involved with Occupy Wall Street for people to shift their funds from traditional banks to credit unions. This action put the “movement” back in to the cooperative movement. The challenge is to keep the cooperative movement moving, going, to create ways for activists to participate, as activists, in building a cooperative economy.

Where do we go from here?

I think an interesting question is, at what point does building cooperative alternatives within the capitalist economy result in a real shift in the economy. I'm talking about a shift towards a more democratic, more egalitarian system. And how can we build a radical coop movement.

We need co-op leadership, this is part of the reason why I ran for the board of the food co-op in the first place. Let me again make a pitch for the general manager position that's open at the PFC. We also need organization & institution building. In many ways my proudest achievement as a co-op activist is the starting and development heiwa house cooperative. I would like to encourage any activist interested in building a cooperative economy, or a cooperative society to identify some human need that could be addressed through a cooperative institution, and then to set about building.

Beyond leadership, and organizations, movements are built around culture. When individuals identify as being part of a co-op movement then there is a co-op movement. We need co-op songs, and creative expression.

Finally I'll suggest that a radical co-op movement should have political goals, goals for legislative change that will help cooperatives to grow, but also broader political goals that reflect cooperative values.