Co-ops have profited from the challenges of hard economic times
Berkeley, Calif. — One form of business has weathered the recent recession rather well. In fact, the cooperative is basking in better times. With high unemployment and tighter budgets, more people have opted for co-ops.
''Co-ops can be models of democratic enterprises that are a third way - neither government-owned nor traditional absentee-owned, management-run, bottom-line enterprises,'' says economist Derek Shearer, author of the book, ''Economic Democracy.''
Shearer came here to address 500 delegates at the 54th annual Consumer Cooperative Alliance training institute recently. According to the CCA, the delegates represented 50,000 to 75,000 consumers throughout the United States and Canada.
Based on democratic principles such as ''one person, one vote'' and open membership, cooperatives offer the promise of local control over the basic necessities of life. They range from housing co-ops and consumer-owned supermarkets to worker-owned factories and retail outlets.
''Most Americans are unaware of the role co-ops play in the American economy, '' says David Thompson, western regional director of the National Consumer Cooperative Bank.
''It goes according to sector,'' he explains. ''If you talk about agriculture , it's pretty large.'' (The Cooperative League of the USA (CLUSA) reports 6,445 farm marketing and supply co-ops do $56.3 billion worth of business a year.)
The ''thousands'' of food co-ops constitute ''probably less than 1 percent'' of retail US food sales, he says. On the other hand, ''many independent retailers own grocery distribution co-ops, which play a substantial role in the delivery of goods.''
Worker-owned cooperatives are still a very small part of the cooperative sector. Mr. Thompson estimates there are ''probably over 1,000'' nationwide.
''The co-op sector should be significant,'' Shearer says. ''Everybody ought to have that choice. That's true in Europe; the cooperative sector is almost a third of the Swedish economy.''
What's holding American co-ops back?
''America is the most conservative capitalist country in the world,'' Shearer says, ''and co-ops have been attacked by the majority business culture.
''Also, in other contries there are large government institutions that help finance co-op development. We just started one in this country - the National Consumer Cooperative Bank.''
The bank, which only began accepting loan applications in 1980, provides capital to cooperative enterprises. It has approximately $225 million in assets, and the principal shares are owned by borrowers that are co-ops.
The bank is smaller than anticipated due to cutbacks under the Reagan Administration. As a result, ''We now have to limit a lot of our activities. We have to understand markets better, be more prudent in how we use the money,'' says Tom Conduit, bank president.
Another problem has been with the co-op organizers themselves.
''It's been difficult for a lot of co-op people to learn that business skills are neutral, that there's nothing inherently evil about accounting,'' Shearer observes.
While still far from posing a threat to corporate America, the cooperative sector is growing.
In 1979, according to CLUSA, 920 co-ops sold $750 million worth of consumer goods to a million member families. By 1982, they had grown to 5,000 consumer-goods co-ops and 30 cooperative warehouses doing an annual volume of $1 billion retail and $123 million wholesale.
The greatest growth potential for co-ops, according to Shearer, is in the employee-owned field.
''The combination of plant closings around the country and the growing educational level of the American work force argue for people having an ownership stake in their firms,'' he says.
Pacific Rim Natural Foods, a cooperative wholesale operation in Seattle, with 50 full-time employees and $8 million in gross sales, demonstrates one form of democratic management.
Running a successful business seems to be a crash course in pragmatism, even for die-hard idealists.
''We had to delineate roles and lines of authority for it to work, because it can easily become confused,'' says Cynthia Anderson, Pacific Rim board president. ''It's difficult to go from being a worker to sitting on the board of trustees. You're under a manager, and then you're managing that manager's manager.''