A World of Cooperation and Shared Ownership

We hold in our own hands the key to building a sustainable economic future. Literally. By placing responsibility and ownership into the hands of employees globally, we have the ability to mold an economy that benefits us all.

It's possible by embracing the idea of economic democracy.

Traditionally, economic democracy represents a socio-economic arrangement in which business enterprises are democratically managed and worker-owned. Think Organic Valley, the $500 million leader in the organic dairy industry, which is also a cooperative of family farms.

Cooperatively-owned businesses can range from small-scale local companies to multimillion dollar global businesses. While form and structure varies (worker cooperatives, consumer cooperatives, producer cooperatives, purchasing cooperatives and credit unions), these businesses share a common goal: to primarily benefit a group of stakeholders rather than primarily outside investors.

Shared ownership helps diversify rather than concentrate wealth. It roots the value it generates in communities, keeping assets and resources from being transferred from local communities to multinational corporations and their owners. Organic Valley's farmers have a tangible financial stake in the co-op, amounting to 5.5 percent of each member's annual sales. Each member farmer also is entitled to a single vote in decision-making.

These economic institutions exist in all sectors of our economy, from banking, finance and insurance to education, manufacturing, retail and agriculture. Economic democracy exists within capitalist economies and does not reject the role of markets, but rather limits the primacy of the profit-maximization motive that currently drives the way in which most businesses engage with the market.

Today, throughout the world, cooperatives already employ more than 100 million people and have more than 800 million members. In the United States, cooperatives have more than 120 million members and employ more than 850,000 people, and indirectly generate more than 2 million jobs. Additionally, according to the National Center on Employee Ownership, approximately 13.6 million employees in the United States are employee-owners through their participation in 11,300 employee stock ownership programs (ESOPs). Combined employee assets held in these ESOPs exceed $900 billion.

The breadth and depth of co-ops in the United States can also be seen in the following figures. Today, the more than 29,000 co-ops in the United States:

• Have total assets of 3.1 trillion;
• Operate at more than 72,000 establishments nationwide;
• Deliver telephone services through 255 co-ops to 964,000 households;
• House more than 1.5 million households through 6,400 co-ops; and
• Provide financial services through 7,486 credit unions to 91.76 million member-owners, with total assets now exceeding 925 billion.*

Well-known cooperative businesses range from the aforementioned Organic Valley to Nationwide Mutual Insurance, an 80-year-old Fortune 500 company, with more than $135 billion in statutory assets; Land O'Lakes, Inc., a farmer-owned food and agricultural cooperative with $12 billion in sales; Unified Grocers, the largest wholesale grocery distributor in the western United States with over $4 billion in sales; and Amalgamated Life Insurance Company, founded in 1943 with more than $800 million in annual premium, premium equivalencies and fee-for-service.

In Europe, Italy's Legacoop and Spain's Mondragon multi-sector cooperatives have been able to both reach significant scale and demonstrate long-term sustainability. Legacoop, founded in 1886 in Milan, now has more than 15,000 member cooperatives and employs more than one million people. Mondragon, founded in 1956, now holds 33.3 million euros in assets and employs more than 85,000 people internationally.

A world of cooperation and shared ownership is not only possible, but critical to address the chronic unemployment, the dangerous concentration of wealth and the environmental destruction our world currently faces.

Let's make the possible tangible so we can put our hands to use building our economic future.

Resources for additional information about economic democracy:

The Democracy Collaborative
ESOP Association
National Center for Employee Ownership (NCEO)
National Cooperative Business Association
National Federation of Community Development Credit Unions
Ohio Employee Ownership Center
U.S. Federation of Worker Cooperatives
Vermont Employee Ownership Center

*Sources include industry reports (e.g., 2010 CUNA data on credit unions), a 2009 USDA-financed study, authored by Steven Deller, Ann Hoyt, Brent Hueth and Reka Sundaram-Stukel of the University of Wisconsin, and "Worker Cooperatives for the 21st Century" by Nicholas Luviene, Amy Stitely and Lorlene Hoyt.

Jeffrey Hollender is co-founder and former CEO of Seventh Generation, which he built into a leading brand known for its authenticity, transparency, and progressive business practices. For more than 25 years, he has helped millions of Americans make green and ethical product choices, beginning with his bestselling book, How to Make the World a Better Place, a Beginner's Guide. He went on to author five additional books, including The Responsibility Revolution and Planet Home. He is a board member of Greenpeace US and Verite and also co-founder of the American Sustainable Business Council. Please visit www.jeffreyhollender.com to learn more and visit Jeffrey's blog. He can also be found on Twitter (@jeffhollender) and on target="_hplink">Facebook.

 

 

 

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Comments

[n1303k]

09:16 PM on 06/08/2011

This is a laudable tribute to cooperatives, but alas it leaves me wondering whether Mr. Hollander really understands what a cooperative is. A cooperative is NOT an ESOP, nor is it a mutual insurance company. Those are, admittedly, somewhat like cooperatives but they do not embrace the same values and principles that cooperatives do (see www.ica.coop for information about what those values and principles are).

[RodneyNorth]

01:00 PM on 06/08/2011

We at Equal Exchange - www.EqualExchange.Coop - can testify to the viability of worker co-ops (the least well-known type of co-operative).
Even though we operate in hyper-competitive categories like coffee, tea, chocolate and bananas we've managed to average 30% annual growth over 25 years; have hit approx $40M in annual revenue; are consistently profitable; and now have over 100 worker-owners. Plus we've done all that while also pioneering the Fair Trade model that helps connect millions of US consumers with small farmer co-ops around the world on business terms that more equitably and sustainably distribute the benefits of trade.

Folks who are serious about learning more about worker co-op's, including how to start or grow one, should check out the Eastern Conference on Workplace Democracy that'll be held in Baltimore, July 9 & 10.
http://east.usworker.coop/content/connecting-our-workplaces-building-cooperative-economies

[athertonjohn]

12:28 PM on 06/08/2011

Great call to action, in the UK we have around 5000 co-operatives from the smallest 2 person web design start-up, to multi billion pound retailers and financial businesses.

If you are UK based and want to set-up your own co-opertive have a look at www.uk.coop Co-operatives UK is the national network for co-operatives.

[Cricket4445]

08:56 AM on 06/08/2011

Any community can start their own cooperative. In fact, natural food co-ops are being organized at an accelerating rate all over the country. People, regular citizens, are starting to see the light and want to take back ownership of their communities and jobs from large, multi-national corporations. They want the goods and services they want, not what someone in an office miles away tells them they should want. I've worked for cooperatives for more than 20 years because I've seen and continue to see the real, lasting positive changes they make in their communities and their member and employee lives.

Check out http://www.foodcoopinitiative.coop/ if you're interested in starting your own cooperative. (Note: I don't work for this organization)

Thanks for this article, btw.

[ethicsblogger]

05:39 PM on 06/07/2011

Do employees want to be owners? Some might, but others may not. I personally don't want any managerial say in the organization I work for -- I just want it to be run well. There are currently no legal barriers to employee ownership (or other kinds of cooperatives). But there is a body of literature (led by Henry Hansmann) on why various kinds of cooperatives succeed, or fail, under various circumstances.

[onethreeseven]

08:50 PM on 06/07/2011

You may simply want the company you work for to generally "run well" but who is defining whether or not it is being run well? To the absentee stockholders who likely don't even know what small fractions of companies they own, 'running it well' may well mean firing you in order to exploit cheaper labor somewhere else in order to get a little bigger dividend check. To you, the worker, loosing your job is probably a much bigger deal even if there are plenty of other job opportunities out there for so "running it well" means that you can continue working so that you can take care of you and yours. Which owners would you trust more: the absentee stockowners or the people working around you?

Also cooperative ownership entails a variety of managerial arrangements, some of which wouldn't involve direct worker management.

[illvp]

04:24 PM on 06/07/2011

Love it!!! I'm also for social enterprise cooperatives, which are cooperatives that have a social or environmental mission at the forefront of their company. I've created an evolutionary economic model called Producism, which is all about that. http://producism.org