Cooperative economy

From Cultivate.Coop

In its original meaning ‘ekonomos’ was the activity a household engaged in for the purpose of meeting its members’ basic needs; it was not connected to the idea of financial investment or financial profit. This echoes the vision of the cooperative economy put forth by the Rochdale Pioneer Society in England, widely considered the first “modern” co-op[1].

It is also the sentiment expressed in the International Statement of Cooperative Identity[2], based on the Rochdale co-op’s operating principles and repeatedly ratified by thousands of delegates representing co-ops around the world: “A cooperative 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.”

A cooperative economy is an economic system whereby those who employ its specific operating principles and embrace its explicit values can meet their basic needs in personally, socially, and environmentally responsible ways. This ‘multiple-bottom line’ accounting has become widely known as “the cooperative difference”. There are almost no accredited US universities or colleges offering business courses based on the cooperative economy, but there is an international Master’s program designed by and for co-op and credit union managers that is based on exploring how a locally based, democratically run cooperative economy differs from an economy driven by profit-maximizing, often remote investors[3].

What Would a Cooperative Economy Look Like?

Currently, capitalism and communism are the dominant economic organizational systems. In private enterprise (capitalism) and state enterprise (communism) resources are controlled by a minority of the population. Cooperatives offer a third alternative: enterprise is owned by the workers.

Economic models often reflect values of a society. Capitalist economies typically promote individual improvement, whereas communist societies reinforce dedication to the country. Cooperative economy recognizes the right to personal gain within a structure that supports each of its members.

Most economies are a combination of public and private ownership, with a small sector of non-profit or collective ownership. In a cooperative economy, the majority of industry, trade, and commerce would be managed through cooperative organizations. Only the enterprises that are too large and complex (such as civil defense, public water supplies, education, and transportation) would remain in the public sector. Workers in these public enterprises would elect their own representatives to a board of directors so that, as much as possible, it would fit with the cooperative model of equal representation.

Currently, public sector enterprises are for-profit industries, but in a cooperative economy they would supply materials and services to other producers / cooperatives at a reduced price.

Cooperative enterprise would be the largest sector of a cooperative economy. It would be divided into business, community-based organizations, and households. Cooperatives business would produce all types of goods and services, from essential to luxury, including healthcare, legal services, and agriculture. All of these businesses would operate as for-profit enterprise, but profits would be divided among members rather than executives. Cooperative community groups (charities, religious / cultural organizations, non-government organizations) reflect the cultural values of a society and fulfill many of the important works not provided by businesses or government. Child-raising and housework would be recognized in a cooperative economy as an essential facet of society.

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