The Cooperative Century
by Bill Sherrod, Managing Editor
Dawn of a New Day
In the shrinking world of the new millennium, cooperation will become ever more
important in all phases of life political, economic and societal. As natural
aggregators, cooperative businesses will play a key role in giving extraordinary buying
power to ordinary folks.
The year 2000 has arrived. We are poised at the brink of a new century, a new
millennium. The nations economy thunders forward like a supercharged locomotive.
Prospects for the future are breathtaking for all aboard.
The future. Its exciting. And its frightening in some ways, because things
today seem to change so fast that its hard to become accustomed to something before
its passť. So, many of us find it difficult to be certain of anything.
This uncertainty translates into a dark lining to the silver cloud of our optimism. The
very technology which drives our world forward at such a frenetic pace also, in many
instances, serves to confuse and alienate us.
We find ourselves in an age of high times, but also an age of societal polarization,
high-pressure niche marketing, and increasing personal isolation. In this environment,
cooperative businesses are a unifying agent, dissolving artificial barriers and bringing
people together to meet defined needs.
Old Concept, Contemporary Application
Its ironic that a concept conceived in a decidedly low-tech era serves us so well
today. The first successful cooperative was organized in 1752 when Benjamin Franklin
formed the Philadephia Contributionship for Insurance of Houses from Loss by Fire
the oldest continuing cooperative in the U.S.
The modern cooperative business movement is generally traced to formation of the
Rochdale Equitable Pioneers Society in 1844 in Rochdale, England. The Rochdale pioneers
established a set of principles for their food cooperative which have since spread and
been adopted by cooperative ventures around the globe. In the century and a half since the
Rochdale movement, these ideas have evolved and been condensed into a set of seven
principles which form the framework of contemporary cooperative business ventures.
These principles were reviewed and adopted in 1995 by the International Cooperative
Alliance (ICA) to form the general foundation of modern cooperatives worldwide. They are:
1) voluntary and open membership; 2) democratic member control; 3) member economic
participation; 4) autonomy and independence; 5) education, training and information; 6)
cooperation among cooperatives; and 7) concern for community.
The ICA also defined a cooperative as "an autonomous association of persons united
voluntarily to meet their common economic, societal and cultural needs and aspirations
through a jointly owned and democratically controlled enterprise."
Skeptics might note that this all sounds very pie-in-the-sky, even archaic in an age
when virtually any place in the world is as near as a quick point and click. But reality
contradicts this dot-com assumption. Cooperatives today expand almost exponentially: there
are more kinds of cooperatives doing a larger volume of business in more parts of the
world than ever before.
Electric cooperatives, for example, are forming in places where theyve never
existed New York City and California, to name two. In the headlong rush to
restructure the electric utility industry, smaller customers have been left in the dust as
large commercial electric utilities scramble to secure the largest industrial and
commercial customers. The large utilities logic is sound their purpose is to
generate maximum profit for their shareholders. Since there is much more profit in a large
industrial customer than in a small business or residential customer, the best rates are
offered to the biggest users. So what does the small guy do? Aggregate band together
with other small guys and become a big user in other words, form a cooperative.
Electricity is only one of many products or services offered through cooperative
business ventures. Most people are familiar with farmer cooperatives, but not everyone
knows that approximately 30 percent of all farmers products in the U.S. are marketed
through cooperatives. And the products range from Land OLakes dairy products to
Sunkist citrus fruits and Ocean Spray juices.
According to the National Cooperative Business Association:
Consumer-owned and controlled cooperatives pioneered prepaid, group practice health
care. Today cooperative health maintenance organizations (HMOs) provide health care
services to nearly 1.4 million American families.
Food cooperatives have been innovators in the marketplace in the areas of unit pricing,
consumer protection and nutritional labeling.
Retailer-owned food and hardware cooperatives make it possible for hundreds of
independent store owners to successfully compete with large chains.
Cooperative Possibilites are Limitless
Electricity, finance, food and farm products, housing, hardware and insurance are all
examples of goods and services offered through cooperative businesses. But the cooperative
business principles can be applied to virtually any enterprise. The women of Smith Island,
Md., adjacent to Tangier Island in the Chesapeake Bay, formed a crab-processing
cooperative to maintain the solvency and increase the profitability of the seafood
industry on which their islands economy is based. Pre-school and child-care
cooperatives have been formed in communities where there was a need for child care among
families with two working parents. The variety of endeavors to which the cooperative
principles can be applied is virtually limitless.
Equally as important as these principles are the values which undergird them. According
to the ICAs statement of cooperative identity, "Cooperatives are based on the
values of self-help, self-responsibility, democracy, equality, equity and solidarity. In
the tradition of their founders, cooperative members believe in the ethical values of
honesty, openness, social responsibility and caring for others."
Similar lofty principles and values are cited within the mission statements of any
number of businesses. Often, however, the intent of the language becomes lost in the
day-to-day struggle to retain fiscal viability in todays roaring economy. Corporate
business structure, by its very definition, must pay to the shareholder, who has helped
capitalize a business, a fair return on his or her investment.
A cooperative business venture is a simpler creature: the user, or customer, is also
the shareholder, so there is one less layer of fiscal burden on the business. Put another
way, the corporate business entity exists to provide profit for its shareholders by
competitively selling goods or services to its customers, while the cooperative business
entity exists only to provide goods or services to its members.
This is nothing new, but the climate of today is different than it has ever been.
Mergers, acquisitions, profound shifts in the ways of doing business and in society itself
all driven by quantum advances in technology have had the effect of creating
a feeling of personal isolation, of being a number in a vast sea of digital information.
Research indicates that people are profoundly troubled by the perception that human values
are being overwhelmed, inundated in the tsunami of exponentially accelerating societal
Its a climate much like that which prevailed in the early days of the industrial
revolution, when the world, as it had been known before then, changed forever. Thats
the climate that gave rise to the modern cooperative, an idea more fertile today, with
greater potential to enrich the human experience, than ever before.
In this, the first year of the new century, Cooperative Living magazine will examine a
different type of cooperative business in Virginia within the pages of each issue,
beginning with the February edition.
For Further Info...
If youre interested in further information on co-ops in general, a good source of
information is the National Cooperative Business Association, at 1401 New York Ave. NW,
Washington, D.C. 20005-2160. The NCBAs website can be found at
http://www.cooperative.org. The e-mail address is firstname.lastname@example.org.