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Scaling Up the Cooperative Movement

Expanding democratic ownership

This is the introduction to the e-book “Scaling Up the Cooperative Movement” published in partnership with the Grassroots Economic Organizing. The Democracy Collaborative’s senior research associate Thomas Hanna is a contributing editor of the e-book and the author of this introduction. The e-book is available for free here.

In the years since the financial crisis and Great Recession of the late 2000s, growing numbers of people in the United States have come to the realization that the current economic and political system is profoundly dysfunctional.  Public concern continues to grow over increasing disparities of wealth and income, deteriorating social and environmental outcomes, and the dangers of vesting power in large hierarchical organizations – whether private corporations or government agencies. Moreover, with stalemate in the political process continuing unabated and traditional solutions seemingly blocked at every turn, new approaches are becoming increasingly attractive.

But while public sentiment may be more amenable to contemplating fundamental political economic changes than in the recent past, the fact remains that this opportunity has yet to be fully seized. Specifically, the cooperative sector, which forms a basis for many visions of a more just, egalitarian, and sustainable society, remains quite small – vanishingly so when considered in relation to the corporate-dominated economy as a whole.  Despite the boost that economic inequality issues received as a result of the Occupy movement and its offspring, that energy has seemingly not, as of yet, been translated into the widespread creation or strengthening of co-operative enterprises.

Moreover, recent events elsewhere in the world have demonstrated that even when cooperatives and cooperative networks reach larger scale, significant challenges remain. For example, Fagor Electrodomésticos was, until recently, one of the largest appliance manufacturers in Europe: part of Spain’s Mondragon Corporation, a group of 289 worker-cooperatives and businesses employing over 80,000 people.  Because of its high profile, Fagor’s recent bankruptcy has been the occasion for a good deal of self-analysis, criticism and soul-searching on the part of the cooperative community. Meanwhile, the UK’s  Co-operative Group  continues to struggle through a series of crises that has already cost it control of its bank and forced it to sell off numerous assets. It faces a debt load that may threaten the existence of the massive co-op that is the direct descendent of the original Rochdale Pioneers.

There has, therefore, never been a better time in recent history for activists, organizers, practitioners, and scholars to present and discuss alternatives to the current system as well as the challenges facing the cooperative movement as it considers its role in such potential alternatives. This book Scaling Up the Cooperative Movement is a contribution to the ongoing discussion. The included articles are part of an online theme that was originally compiled by Grassroots Economic Organizing (GEO). The whole series can be found on the GEO website. Several of the articles were published elsewhere prior to their appearance in the GEO series and this book. 

PART I: The Planning Question and Framing the Discussion

Part I of the book contains the original debate between Andrew McLeod and myself—laid out in four articles—which was the impetus for the GEO series and was catalyzed by the collapse of Fagor in late 2013. For many people, especially those interested in systemic change and those within the cooperative movement, the failure of one of the most prestigious cooperatives in the world’s most successful worker cooperative network raised a litany of important questions. In Mondragón and the System Problem, Gar Alperovitz and I ask whether Fagor’s failure specifically, and various other criticisms of Mondragón more generally, indicate that there are limits to what cooperatives and democratized economic institutions can accomplish within a competitive, open market systemic design. We suggest that going forward some form or forms of participatory planning, alongside the institutional structure of democratized ownership (including cooperatives), will likely be needed as part of any viable alternative systemic design.

In many ways the issue of systemic design, and the identification and discussion of structural components such as planning and markets, offers more questions than it does answers. This is particularly true for the cooperative movement which, to certain degrees historically, has seen its fortunes shift with various changes in the overarching political economic system. Veteran cooperative consultant and author Andrew McLeod responds in Cooperative Movement Should Engage Government Cautiously that while there is undoubtedly a need for some degree of planning in conjunction with existential crises (such as climate change), the cooperative movement should carefully consider the implications and potential unintended consequences of such an approach on their autonomy, identity, neutrality, and independence. Becoming too heavily involved with and reliant on government planning, he suggests, may in fact end up harming the cooperative movement’s ability to address systemic issues. This is a concern that many other proponents of cooperative enterprise also share, and is in some ways supported by various real-world current and historical developments—including, for instance, the contemporary struggles of newly formed cooperatives in Argentina and Venezuela.

Often in discussions about systems—and specifically about possible designs of future systems—there is a danger of veering too far into the abstract and theoretical. In Cooperative Movement Should Embrace Discussion of Systemic Issues, I inquire why it is that in real-world experience cooperative sectors remain relatively small in most advanced economies, and contend that in order for the cooperative movement to begin to move towards a more systemically important scale, a reconceptualization and reorientation of the actual planning that is already conventional in the current capitalist political economic system will be necessary. This point is taken up by some of the authors in part II with reference to realigning existing governmental programs and processes to support cooperative development. While the concerns about dependency on the state and a resulting loss of autonomy and vitality are unquestioningly legitimate, I argue that if cooperatives are to become the basis, or an integral part of a new, more humane, just, equitable, and cooperative future, some risks with regards to economic planning will likely be required.

A key issue this discussion raises is that of power—and more specifically how the cooperative movement might interact with wider systemic structures and institutions that presently have considerably greater political economic power and influence. In the final chapter of Part I, Planning Must Be Centered in the Cooperative Movement, McLeod concludes the initial debate by suggesting that, at least in the short term, the cooperative movement and cooperative networks should strengthen their own internal planning capabilities and be cautious about participating in wider economic planning efforts promulgated by state bodies that have different, and often contending, values and motives. Only when the cooperative sector has reached the scale and strength to participate as an equal partner, McLeod argues, should it engage in wider efforts at economic planning and systemic design.

PART II: Alliances, Culture and Scaling-Up

To an extent the lively debate about systemic issues in this book reflects a wider discussion occurring in both the cooperative movement and across the spectrum of alternative political economic institutions, experiments, and movements. From climate change to labor issues to civil rights, activists, organizers, practitioners, and theorists are confronting similar systemic limitations and searching for a way past them in both theory and practice. In Part II, many of the questions and challenges posed in the preceding section are addressed from a diverse array of perspectives—and important new issues and considerations are raised. A major focus of Part II is the role cooperatives and the cooperative movement should play in any future, more democratized political economic system, and, importantly, how the cooperative/democratized sector could be scaled up over time.

Joe Guinan, Executive Director of the Next System Project at the Democracy Collaborative, opens Part II with Cooperative Enterprise and System Change in which he expands on some of the systemic and structural impediments to cooperatives discussed in Part I. Guinan contends that a focus on cooperatives alone may not be sufficient, and suggests that the cooperative movement develop an education and alliance building strategy that embraces multiple forms of economic democratization. This strategy picks up on two themes that emerge repeatedly in this section—namely internal cultural development through education on the one hand and a broadening of the cooperative movement’s external reach and capability through closer relationships with other organizations, institutions, and movements on the other.

Another motif that runs through this section is the need to build from the ground up—from the vital everyday experiences, strategies, and ideas of everyday workers, cooperative members, and movement participants, through their organizations and movements as a whole, towards new groupings and collaborations.  In Confronting the “System Problem” Cooperatively GEO member Len Krimerman presents three case studies, each highlighting important real-world lessons and offering pointed questions on the topic of planning from a participatory and collaborative perspective. Further, he offers the prospect of linking the cooperative sector with allied groups and movements in order to grow an alternative economy that would, ultimately, be able to confront and overcome many of the systemic limitations currently being experienced.

This approach is echoed by Hilary Abell, co-founder of Project Equity and former Executive Director of Women’s Action to Gain Economic Security (a San Francisco-based organization that launched a network of worker cooperatives, now Prospera), in Seizing the Moment: Catalyzing Big Growth for Worker Cooperatives. Abell contends that scaling up the cooperative movement is a matter of immediate strategic importance so that both the system changing and life improving potential of cooperatives can be reached in the future. One important component of such an effort, she suggests, is building coalitions and partnerships at the local and regional levels to serve as the foundation for national action. Additionally, Abell provides definition to some of the planning and policy suggestions offered throughout the book, arguing in favor of utilizing existing economic development efforts (invariably involving government on all levels) to grow and promote worker cooperatives.

Of particular interest to many of the contributors are the cultural conditions necessary for the growth of the cooperatives and the democratized sector. Abell suggests that a “friendlier ecosystem” will be required. In addition to the greater availability of capital and supportive public policy, this includes incorporating cooperatives and cooperative values into all aspects of the educational system and developing the internal educational and training components of the cooperative movement. This approach is expanded upon by GEO member Michael Johnson in Scaling-up Democracy Through Empowerment. Johnson maintains democratic movements, including cooperatives, require adopting a “culture-building strategy” that will empower people to realize and actualize their potential for cooperation and change. Such an orientation will involve a focus on deeper questions beyond the purely political or economic, including, among others, the nature of human interaction, exploitation, and alienation. This is important not only for scaling up cooperative efforts, but also for preserving and enhancing their internal culture and governance as they grow.

In the final chapter of Part II, Creating a Cooperative Culture, Caitlin Quigley of the Philadelphia Area Cooperative Alliance addresses these cultural questions within the context of the real-world practices of the Mondragón cooperatives therefore bringing the discussion around full circle. Quigley reports on Mondragón’s efforts to build an internal culture of cooperation and self-management through education as well as participation in the economic decision-making of the network and suggests that the next step for the cooperative movement in the United States is to bring organizations together and develop a “regional cooperative culture and identity.”  She identifies the cooperative model as both a skeleton and an invitation; a structure that is open to high degrees of participation, but is also reliant upon that participation to create the cultural conditions necessary for success, viability, and growth.

This book is also both a skeleton and an invitation. The contributions included are not intended to provide definitive answers; rather they seek to put important issues and perspectives on the table for further discussion. As the cooperative movement, those interested in systemic change, and the general public continues to encounter and confront the limitations, declining trends, and growing threats posed by the existing political-economic system, the need for continued dialogue and discussion of actionable ideas is only likely to increase. Moreover, this book is not the end of this specific exchange of thoughts. We urge any and all interested people to contribute to and continue this discussion on the GEO website.

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