Cooperatives Over Corporations

[Murky]

We're being told by today's High Priests of Conventional Wisdom that everyone and everything in our economic cosmos necessarily revolves around one dazzling star: the corporation.

This heavenly institution, the HPCW explain, has such financial and political mass that it is the optimal force for organizing and directing our society's economic affairs, including the terms of employment and production. While other forces are in play (workers, consumers, the environment, communities and so forth), they are subordinate to the superior gravitational pull of the corporate order. Profits, executive equanimity and a healthy Wall Street pulse rate are naturally the economy's foremost concerns.

How nice. For the wealthy few. Not nice for the rest of us, though. We're presently seeing the effect of this enthronement of self-serving corporate elites. Millions of Americans are out of work, underemployed and tumbling from the middle class down toward poverty. Yet excessively paid and pampered CEOs (recently rebranded as "job creators" by fawning GOP politicians) are idly sitting on some $2 trillion in cash, refusing to put that enormous pile of money to work on job creation.

This is a great article by Jim Hightower. I think he's on to something here.

Spoiler :

The Powers That Be keep us tethered to this unjust system of plutocratic rule only by constantly ballyhooing it as a divine perpetual wealth machine that showers manna on America. Any tampering with the hierarchical control of the finely tuned machinery of trickle-down corporate capitalism, they warn, will cause a collapse and crush American prosperity.

Ha! Prosperity for whom? The corporate order itself has come crashing down on the prosperity of America's workaday majority — and the people are no longer fooled about the system's "divinity." From the Wisconsin rebellion to the outing of the Koch brothers' efforts to impose their plutocratic regime on us, from the Occupy movement to the spreading grassroots campaign to get corporate cash out of our elections, we commoners have finally peeked behind the curtain to see the fraud being perpetrated by the wizards of wealth inequality.

Yet, tightly clutching their wealth, the wizards retort that the only alternative is the hellish horror of government control, screeching "socialist" at all critics to scare off any real change.

But wait. The choices for our country's rising forces of economic and political democracy are not limited to corporate or government control. There's another, much better way of organizing America's economic strength: The Cooperative Way.

Cooperatives can (and do) provide a deeply democratic, locally controlled, highly productive, efficient percolate up capitalism.



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Co-ops are wholly in step with the values, character, spirit and history of the American people.
While socialism has been cast by the corporatists as a destroyer of our sainted free-enterprise system, the cooperative approach is not an -ism at all, but a democratic structure that literally frees the enterprise of the great majority of Americans — which is why the co-op movement is fast spreading throughout our country.

While it's rarely mentioned by the conventional media, completely missing in the political discourse, not considered by economic planners and chambers of commerce and not known by most of the public, there are 30,000 cooperatives in America (with 73,000 places of business). A 2009 survey by the University of Wisconsin's Center for Cooperatives (www.uwcc.wisc.edu) found that these energetic enterprises have 130 million members, registering $653 billion in sales and employing more than 2 million people.

There are several types of co-ops, including those owned by workers (there are 11,000 of these, with 13 million worker-owners). Also, there are cooperatives owned by consumers, producers, local businesses, artists and communities, as well as hybrids of those categories. They function in every sector of our economy — manufacturing, health care, transportation, banking, farming and food, media, massage, child care, funeral services, interpreting and translating services, advertising, home building, high tech, engineering, energy ... and even a strip club in San Francisco.

Co-op businesses do everything that a corporation can do, but with a democratic structure, an equitable sharing of income and a commitment to the common good of the community and future generations.

You might be surprised to learn that such national brand names as ACE Hardware, Best Western Hotels, Organic Valley, REI and True Value Hardware are organized as co-ops, rather than as corporations. The strength of the movement, however, is in the limitless number of local cooperatives flowering all across the country. From Union Cab of Madison (http://www.unioncab.com/) to KOOP Radio in Austin (http://www.koop.org/), from Evergreen Cooperatives in Cleveland (www.evergreencoop.com) to Circle Pines Center in Michigan (www.circlepinescenter.org), citizen co-ops are highly prized for their unique personalities, human scale, democratic values and community focus.

Cooperatives are a big, structural reform that ordinary Americans can implement right where they live, giving small groups a pragmatic and effective way to push back against the arrogance and avarice of the centralized, hierarchical corporate model. Not only do co-ops work economically, they also make people important again, offering real democratic participation and putting some "unity" back in "community."

 

[bhsup]

Where do sole proprietorships, LLCs, etc fit in all this? You know, the small businesses that are the true strength of our economy?

 

[Murky]

Where do sole proprietorships, LLCs, etc fit in all this? You know, the small businesses that are the true strength of our economy?

LLCs I don't trust so much because they are trying to limit their personal liabilities and so don't have to take personal responsibility. Small business are good.

 

[Arwon]

Businesses are basically a place where producers, workers, financers and customers interact. Businesses can be owned by any of those four things.

Conventional corporations are just cooperatives of financers instead of cooperatives of producers (like a dary famer co-op), workers (like a law firm) or customers (like Costco or a tradespersons supply store owned by tradespeople).

The reason there's more corporations owned by a cooperative of financers is it's easier to sort out voting and have a unity of interests by all the owners. Money determines voting power, direction is set by people who are all interested in making money. Other types of co-ops tend to be more difficult to figure out voting arrangements and direction-setting unless there's something common to all the owners (as there is in the above examples). Workers co-ops are difficult if there are different types of worker, producers co-ops generally only have a single commodity with voting determined by how much of it you make.

 

[illram]

Co-ops can be very successful businesses. REI, a popular outdoor store, is a co-op. Credit Unions are co-ops. You can maintain a smaller management group to avoid having too many disparate groups having a say in the business, so long as members maintain some sort of ownership or financial stake. (At REI, for example, you get members only discounts or refunds every year.)

Co-ops are a great alternative for corporations IMHO; the only problem is they require a group effort, obviously, so you cannot really have the model of one or two visionaries building an empire or a small but large piece of investment entirely running the show for the benefit of a small number of investors.

 

[Cutlass]

Why not both? The issue is that a cooperative has a hard time getting the capital of a larger corporation. So that's limits on growth.

 

[aimeeandbeatles]

I honestly cant even understand the OP but the milk I buy personally comes from a co-operative. Its a lot better than some of the other milk brands in the store.

 

[Arwon]

Co-ops can be very successful businesses. REI, a popular outdoor store, is a co-op. Credit Unions are co-ops. You can maintain a smaller management group to avoid having too many disparate groups having a say in the business, so long as members maintain some sort of ownership or financial stake. (At REI, for example, you get members only discounts or refunds every year.)

Co-ops are a great alternative for corporations IMHO; the only problem is they require a group effort, obviously, so you cannot really have the model of one or two visionaries building an empire or a small but large piece of investment entirely running the show for the benefit of a small number of investors.

I think they also generally get tax breaks that financial corporations don't.

 

[BasketCase]

Yet excessively paid and pampered CEOs (recently rebranded as "job creators" by fawning GOP politicians) are idly sitting on some $2 trillion in cash, refusing to put that enormous pile of money to work on job creation.

Why do you think that is, folks? The mortgage and banking crisis we've been stuck in for the last three years is the reason. That crash produced two primary results. First, banks are now trying to avoid any more irresponsible lending; hence, they're afraid to lend. Second, the multiple rounds of bailouts by Bush and Obama made further bailouts extremely unpopular.

Corporations know exactly where they stand: they can't depend on the banks to carry them through tough times, and they can't depend on the government for any more bailouts. Corporations know they're on their own. So they have to keep their own cash reserves in case the market takes another unexpected tumble. They have to be ready to weather tough times themselves. Result: they have to keep a large cash reserve in order to minimize the risk of going bankrupt. They're keeping that enormous pile of money because they have to.

There are only two solutions. Either loosen up the banks or be ready with more bailouts. And I'm suspecting nobody in here is ready to do either. Therefore: welcome to the new economic reality, folks. Get used to it.

 

[Hygro]

Where do sole proprietorships, LLCs, etc fit in all this? You know, the small businesses that are the true strength of our economy?

Gigantic super mega mclarge huge corporations are LLCs, and small businesses account for about half of our industry.