The Cooperative Economy Bandwagon

This week, even the New York TImes jumped on the cooperative economy bandwagon, with an article titled "Who needs a boss?" As Shaila Dewan writes: "Support for full-fledged co-ops has inched into the mainstream as communities have grown weary of waiting for private investors to create good jobs — or sick of watching them take jobs away." She explains that co-operatives have as good or better outcomes than "regular" businesses, and are much less likely to lay off workers in a downturn (at the same time as Sears Canada doubled its executive salaries while laying off over 2,000 workers last year). photo by Peter on flickr

Much of the trouble of starting cooperatives comes from the need to get capital investments - "The biggest challenge co-ops face is lack of capital, which is why they are often labor-intensive businesses with low start-up costs. Banks can be hesitant to lend to co-ops, perhaps because they aren’t familiar with the model. Meanwhile, credit unions — another form of cooperative — face stringent regulations on business lending." We should also note that when the financial sector is very divorced from the real economy, massive gains for investors often come from wheeling and dealing failing businesses, or those that are dramatically cutting their workforce (like Sears). Those gains don't come from investing in successful businesses, necessarily, or don't come at the same volume or pace that speculation can bring. This separation between what financiers expect and what benefits real people in the economy is an urgent issue.

Another issue came up in the comments on the article, from Rebecca Wheeler:

"I've been working at a cooperative for 10 years and can never go back to working somewhere that I don't have a voice. 

The biggest barrier for worker cooperatives is educating and then empowering people to join or make their own cooperatives. It's just too easy to keep doing the easy thing: working for someone else in an already established business. Once people are educated and see the benefits of cooperatives, I think they will also become spoiled for "normal" business structures, but I'm certain that's not a bad thing."

At Groundswell, we're addressing that barrier by peer education with Vancouverites and others about the potential of the new economy, and the practice of starting democratic alternatives-to-business. We're building a new economic logic, bringing enough people in that we have the power to address things like the split between finance and the real economy. And we're so glad to be part of something larger than ourselves.