The Co-operative Movement
The Need for Alternatives
The bottom line goals inherent in capitalism and globalization are proving not compatible with sustaining the needs of communities locally and around the world. In capitalism, perpetual growth is the goal for the purpose of maximizing return on investment for owners of proprietorships and shareholders of corporations. The measure here is profit and all decisions are made to maximize this bottom line (in the case of corporations, it is in fact illegal to do otherwise). As a result, wealth is continually concentrated to a few and the other end of the gap is getting larger and poorer while communities and the health of the environment necessary to sustain those communities are compromised to achieve this one goal. All around the world, those communities are rejecting this model by engaging in alternative forms of commerce and protests such as the recent occupy movements.
If on one end of the spectrum is the corporation, the other extreme is the not-for-profit (NFP) sector. Like their name suggests, the goals and purpose of NFPs do not include making a profit. Rather they work towards social aims and serving their communities of interest is the mission. NFPs depend on funding from governments through grants and charitable donations. Within this model, many NFPs are not sustainable if they are not able to access the necessary funding to operate. Paradoxically, during times of austerity when extensive cuts force many to close are those times when most services are needed most. As a result of this dependence on external funding, most NFPs are forced to make compromises and design their programs based on the wishes of external stakeholders to secure continued and additional funding. This inevitably limits the ability of NFPs to work autonomously for the needs of the communities which they serve.
Between both these extremes is another alternative where organizations are using business strategies to achieve a social purpose. One term for this type of business is social enterprise where self sustaining businesses work within the capitalist system to make a profit and work for a social benefit. Other terms that related to this middle ground include social entrepreneurship, the fourth sector and participatory economics. Fair trade and micro credit are examples of such market based social approaches to doing business and co-operatives are another. As a self-help organization, a co-operative has the freedom to make decisions autonomously. For more information on businesses seeing beyond the bottom line, check out Making Money Like the Bee in the resource guide and links under social enterprise.
The Co-operative Movement
Co-operatives are based on the values of self-help, democracy, equality, equity and solidarity. Co-operatives have been around for over a hundred years but are regaining momentum all around the world. A co-operative is an organization that is owned by the members who use its services or by the members who are employed by it. There are many different types of co-operatives such as agricultural co-ops (i.e. Organic Meadow), consumer co-ops (i.e. Mountain Equipment Co-op and housing co-ops), credit unions (i.e. Desjardins) and worker co-operatives (i.e. La Siembra, the Big Carrot and us!). They can also be any size from small businesses who’s employees decide to continue as co-operatives as a succession plan after an owner retires (i.e. Ram Wools; video in resource guide) to the multi-division giant Mondragon Corporacion Cooperativa from the Basque region of Spain which is a network of multiple of co-operatives employing over 80,000 people (see resources guide for history and organizational structure of Mondragon). Any type of business can be a co-operative and what they all have in common is that they are motivated by both an economic and social goal and the ethical values of honesty, openness, social responsibility and caring for others.
Co-operatives also differ from other types of enterprises in these additional ways:
- Purpose is to meet the common needs of it’s members (not maximize profit)
- They are owned by their members (rather than shareholders or proprietors)
- Decisions are made democratically by one member, one vote or consensus (versus one share one vote allowing individuals with more shares greater control)
- Profits are distributed amongst members (rather than disproportionately concentrated to a few)
Benefits of Being a Co-operative
- Since the main objective is not to immediately maximize return on investment, co-operatives have the freedom to make decisions with a long-term vision rather than for short term gains
- They are locally owned by members within their own community and since profits are distributed among members, the gains remain local as well
- They have higher rates of success for start ups in their first years and are more likely to do better during times of recession as compared with traditional enterprises
- Co-operatives are fiscally responsible and more conservative therefore less likely to have to lay people off during times of economic tension
- Have much tighter pay differentials (ratio of lowest to highest paid employee). At CAYA it’s 1:2, Mondragon Co-operative is 1:6. Compared this to corporations where 1:300 is not uncommon
- They tend to re-invest to better serve their members and communities
- Co-operatives can make decisions autonomously without having to appease external funders or shareholders
- We are able to live our values (CAYA Core Values are what make us awesome!)
Come As You Are Co-operative
We don’t claim to know all the answers (Be the Anti-Experts) to solving the political and economic problems of our capitalist society, but as a co-operative we’re dedicated to following the seven principles of co-operative (contribute co-operatively) while working to serve our communities through our Core Values.
You may wish to further explore some of the additional resources in the Resource Guide to gain more understanding about co-operatives and their movements. Perhaps you even know of some interesting resources you’ll wish to share with CAYA employees and even add them to the resources list (Create Nerdy Fun).