Is the Cooperative Economy Next in a Post-Consumer World?
For a significant part of the 20th century, the Manufacturing Economy generated unprecedented material prosperity in the United States. Then, as well-paying factory jobs migrated to corners of the world where labor is much less expensive, it was the Information Economy or the Service Economy that provided gainful employment and enabled the consumption underpinning our national and individual well-being.
Today, in the 21st century, upbeat discussion now promotes the “Gig” or “Sharing” Economy as offering both personal freedom and financial rewards for those of us who pursue the entrepreneurial promise typified by Uber drivers or the income to be gained from opening our homes to Airbnb customers. However, the current national debate over income inequality and the economic stresses experienced by more and more individuals in the U.S. and other countries may signal movement toward another form of economic organization — the Cooperative Economy. It’s a possibility that Professor Maurie Cohen posits as a faculty member in NJIT’s Department of Humanities and director of the Science, Technology and Society program.
Considering Post-Consumer Realities
In articles, talks at conferences, and classroom discussion, Cohen takes an analytical look at life in the emerging post-consumer world. He explores the topic at length in his book, The Future of Consumer Society: Prospects for Sustainability in the New Economy, published by Oxford University Press. He has also shared his thoughts on sustainable consumption in Stockholm, Sweden, at the invitation of MISTRA, the Swedish government’s funding foundation for environmental research. Over the past few years, MISTRA has established “outwardly looking” research centers at several Swedish universities, including one focused on sustainable finance at the Stockholm School of Economics.
“There’s growing recognition that contemporary forms of consumption entail deeply rooted social and ecological problems and present significant political challenges,” Cohen says. “What we regard as the consumer society is coming under significant stress caused by demographic ageing, changes in our society’s consumption profile, and growing income inequality. Due to stagnant wage income, increasing numbers of people are losing their capacity to consume, which for many decades has been viewed as the path to personal happiness and national prosperity.”
In Europe, Cohen observes, there is greater willingness to consider governmental action with respect to mitigating the effects of declining capacity to maintain post-World War II patterns of production and consumption. This commitment includes consideration, however tentative, of providing people with some form of guaranteed basic income. The concept is comparable to a nationalized version of the Alaskan Permanent Fund in the U.S., which makes an annual distribution to residents of Alaska based on income from the state’s oil revenues.
Nonetheless, the economic impact persisting from the Great Recession continues to constrain even countries more receptive than the U.S. to implementing government policies aimed at positive social adjustments, policies that many legislators now deem too costly. The result is rising anger and personal economic apprehension fueled by a decline in well-paying jobs for reasons that include globalization.
In France, for example, the surprising — or perhaps unsurprising — popularity of a satirically biting documentary exemplifies how so many people who once felt materially comfortable now view their situation. The film is Merci Patron!, which translates as Thanks, Boss! The creator, François Ruffin, credits Michael Moore’s equally acerbic Roger & Me as a prescient inspiration. In both films, an earnest picaresque protagonist tries to question the head of a major corporation about business decisions made at the expense of workers and communities — the multinational luxury goods conglomerate LVMH in Merci Patron! and General Motors in Roger & Me, which chronicles the decline of Flint, Michigan, as jobs in the automotive industry vanished.
“So what is the alternative if the ability of people to support themselves and their families with wage income is collapsing, and there’s not much chance of substantial help from the government?” Cohen asks. One possibility is rooted in the evolution of a concept that garnered significant interest in the past — mutual economic cooperation at the local or regional level.
Historically in the U.S., this has involved consumers joining together to establish — and jointly own — mutually beneficial enterprises. By 1920, there were more than 2,000 general stores that were consumer cooperatives. In the 1930s, President Franklin Roosevelt’s New Deal encouraged the creation of electric power cooperatives that brought the benefits of electricity to millions of people. Credit unions are another example of such cooperative engagement, and an enduring legacy of the New Deal.
But the benefits of these cooperative economic enterprises accrue mainly to their consumer-owners. In the 21st century, Cohen suggests, a more balanced social equation offering even broader benefits — particularly job opportunities — might be implemented through worker-consumer cooperatives. In the post-consumer world, such organization could contribute to a more sustainable system of production as well as consumption.
A degree of worker participation in the ownership and governance of the organizations they work for also is not new in the U.S. Employee stock ownership plans are an example. However, the concept of the worker-consumer cooperative goes much further, with the workers in what Cohen calls a “multi-stakeholder” enterprise having total responsibility for collective management decisions. At the same time, he emphasizes, people would have a much greater financial stake in the enterprises they work for as well as buy from.
A Challenging Alternative
Some worker-consumer cooperatives do operate successfully in the U.S. today. However, as Cohen says, they tend to be “micro-sized” — a grocery cooperative in North Carolina and a craft brewery in Texas, for instance. In Europe, on a considerably different scale, the largest worker-consumer cooperative in the world is the 800-store Eroski supermarket chain, a subsidiary of the Mondragón cooperative based in the Basque region of Spain.
Historically, U.S. trade unions have not been supportive of the worker-consumer cooperative model for employment. But that, too, is changing. The United Steelworkers Union has entered into an agreement with Mondragón to assess the feasibility of union-sponsored cooperatives. To date, this exploration has yielded positive results with the formation of several worker-consumer cooperatives facilitated by the union, including cooperatives specializing in energy efficiency and food wholesaling.
The interest that New York City is taking in the cooperative model reflects the potential for additional support at the level of municipal government. The city is currently providing organizational assistance for cooperatives as another strategy for fostering economic development.
The concept of the worker-consumer cooperative is definitely generating interest as a socially innovative addition to the evolving range of routes to personal economic security. At the same time, it’s an alternative to more conventional employment that presents significant organizational challenges. For example, there is the question of which businesses on the present-day economic landscape would be amenable to this organizational form, and would financing for moving a worker-consumer cooperative from proposal to operation be readily available.
Management structure is another major consideration. Ideally, Cohen says, a cooperative operates on the democratic principle of each member-owner having one vote when it comes to the many decisions that must be made to facilitate success. In theory, a cooperative will succeed only if the participating individuals are fully engaged in managerial decision-making — to very regularly “come together over the back fence” for discussion and decision, as Cohen puts it.
It’s legitimate to question the practicality of such organizational democracy when it comes to large, complex enterprises, Cohen notes. “Since it can be difficult to motivate people to become fully engaged cooperativists, there is often a tendency to veer toward professional management. So at the operational level there might not in some cases be a significant difference between firms that are conventionally organized and those that are cooperatively organized.”
In Cohen’s estimation, the loss of economic security that our society once offered makes it necessary to weigh the pros and cons of alternatives to what we thought would always be the path to the good life in the workplace and the supermarket. However challenging, one of these alternatives may very well be participation in a cooperative both as a worker and a consumer.
By Dean Maskevich