Learn about worker-owned co-operatives, check out The Seven Principles of Co-operatives, and get more information about what it means to run a business with a democratic, egalitarian, and feminist mandate.
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 1:1, 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 (our 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-operatives (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).
The Seven Principles of Co-operatives
The Seven Principles of Co-operatives are the central tenets of the co-operative movement. As a sex-positive, worker-owned co-operative, our sex-ethics are guided by our Core Values and Culture, while our business ethics are inspired and governed by the co-operative principles.
A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
Comment: The definition makes it clear that it is people voluntary coming together to meet their needs that forms the basis for a co-op. For a worker co-op the key need is viable and fulfilling employment for the members.
Co-operatives are based on the values of self-help, democracy, equality, equity, and solidarity. Co-operative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.
Comment: The values clearly indicate the ethics and solidarity that members of a worker co-op must follow and that should guide the co-op’s actions both with its members and customers,and with the broader community. Following these common values provides the foundation for building the commitment from, and relationship between, the members that is required for the co-op’s long-term success.
Comment: The co-operative principles are guidelines by which co-operatives put their values into practice. Members of worker co-operatives should be aware of the ideals that set them apart from conventional capitalist businesses.
The Seven Principles of Co-operatives
1st Principle: Voluntary and Open Membership
Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.
Comment: It is important to note here that the key service used in the worker co-op is employment and therefore the membership while open and non-discriminatory is usually limited to the people that work for the worker co-op.
2nd Principle: Democratic Member Control
Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote), and co-operatives at other levels are also organized in a democratic manner.
Comment: In a worker co-op (a primary co-op) each member has one vote. The members elect a board of directors that has the authority and the responsibility for the management and supervision of the co-op. The directors are accountable to the members. For this democracy to be effective in the worker co-op following the co-operative Values is essential. It is also essential that the members take their responsibility to participate seriously.
3rd Principle: Member Economic Participation
Members contribute equitably to, and democratically control, the capital of their co-operative. They usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
Comment: This principle expresses the fundamental economic difference between a worker co-op and a traditional business. In a worker co-op capital is the servant of the co-operative. Returns on capital are always subordinate to the primary way of sharing the surplus (profits) between the members which is based upon amount of work they have contributed to the co-operative.
4th Principle: Autonomy and Independence
Co-operatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, 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.
Comment: This principle emphasizes that as an independent enterprise a worker co-op depends upon it members commitment and hard work for its success. It is no one else’s job. It also indicates how important it is that any agreement made to secure capital for the co-op’s operations should be on terms which ensure the members remain in control of the co-op.
5th Principle: Education, Training and Information
Co-operatives provide education and training for their members, elected representatives, managers, and employees so 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.
Comment: To run a worker co-op successfully the members must have many skills. Few members come to a worker co-op with all these skills, so to succeed the co-op must ensure that the members, directors and managers get the training they need to fully contribute to the success of the co-op.
6th Principle: Co-operation Among co-operatives
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional, and international structures.
Comment: In the same way the members of a worker co-op benefit from their mutual efforts, their co-op (and thus themselves) can benefit from co-operating with other co-operatives often by forming service federations with similar co-ops. For worker co-ops the CWCF is such a federation and provides benefits to its members in the areas of training, financing and information sharing while also securing grants that are accessible for member projects.
7th Principle: Concern for Community
While focusing on member needs and wishes, co-operatives work for the sustainable development of their communities
Comment: Worker co-ops must always remember that they are ultimately dependent upon their larger community and the natural environment. In all activities designed to meet their own needs they should consider how to carry them out in a sustainable fashion that strengthens their communities.
Learn more about worker-owned co-operatives at the Canadian Worker co-operative Federation.