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If you haven’t heard already, October is National Co-op Month in the U.S. It’s something Yanks have been celebrating since 1964.
This year’s Co-op Month theme is “Build Back for Impact.” I can’t think of a better theme and strategy for a post-Covid world.
Co-ops are built for this moment. Why do I think that? Well, let me share a reflection.
I interned at the National Telephone Co-operative Association back in grad school. I ran their in-house library and studied internet diffusion in rural America with their resident scholar at the time, Dr. Linda Garcia.
This was my introduction to the alter-world of cooperatives. It was eye-opening. I learned that cooperatives undergird rural economies in the U.S., everything from utilities to purchasing co-ops to producer co-ops to banks and more. It includes household names like Land O’Lakes, the third-largest co-op in America with 10,000 employees, and Ocean Spray, which sells something like $2 billion in cranberry products every year.
There’s also a robust professional ecosystem supporting these co-ops of lawyers, accountants, communications firms, financiers, and consultants.
Our research focused on telephone cooperatives as they were the primary providers of internet access to rural Americans.
Through this research, I learned about one of the largest and most successful co-op development efforts ever, one that few Americans know about. It’s the story of how a public-private partnership used the co-op model to bring electricity and telephones to rural America.
The need for action arose because for-profit utilities wouldn’t serve rural communities. It wasn’t profitable. Customers were too spread out. Economists call this a market failure. As a result of this failure, rural areas were falling behind economically and literally drifting apart from the rest of the country.
The solution was the Rural Electrification Administration, the result of a New Deal executive order issued by President Roosevelt in 1935.
In short, this administration provided rural communities with the funding and technical assistance to set up electric utilities. Local communities had to organize cooperatives to build and run the utilities.
The program was so successful that they used the same strategy to get phone service to rural areas.
The resulting co-ops, numbering in the thousands, addressed two serious market failures and transformed millions of rural people’s lives for the better in the span of a few decades.
Why is this relevant now? Well, we’re surrounded by market failures that co-ops are uniquely equipped to address.
For example, unaffordable housing, health care, and higher education; the lack of living-wage jobs; and food and transit deserts are all market failures with proven co-op solutions.
Co-ops have been used this way worldwide. Quebec, Canada, the Emilia-Romagna region of Italy, and Mondragon, Spain are just a few notable examples. Co-op member-owners in these areas own a significant portion of the local economy. Plus, their co-ops often serve populations that otherwise would go unserved, like in health care.
We should recognize this successful history of co-ops addressing market failures for what it is — a proven solution at our fingertips.
In fact, there are hundreds of years of global co-op history to draw on to begin imagining co-op solutions for today.
It’s high time to get over shiny object syndrome and start using that sturdy but slightly rusty co-op wrench from history’s toolbox.
As a way to celebrate co-op month and stimulate your co-op imagination, here are a few resources to feast your mind on:
- Must read: A new book by Sara Horowitz, founder of the Freelancers Union, “Mutualism: Building the Next Economy from the Ground Up.” It’s a detailed blueprint of what I’ve only sketched out above, and from someone who used to chair the Federal Reserve Bank of New York. Now that’s a real career about-face.
- Check out Trebor Scholz recent TED talk about platform co-ops, which combine a co-op ownership model with a platform business. I guess this is how you get co-ops at TED!
- ICYMI, here’s Shareable’s feature story on the acquisition-conversion trend, a promising path for scaling worker ownership. Finally, the sector is developing ways to take in big money to accelerate its growth.
- Our friends at the Sustainable Economies Law Center held a week-long #Coopalooza to celebrate co-ops. Click here for the awesome recorded events and resources.
- Here’s The Counters take on if and how co-ops can bolster the rocky restaurant industry. Are more co-op restaurants in our future? Could be.
- And finally, this Shareable story on how the pandemic is helping to create a new era of employee-owned companies. A combination of forces are converging to spur growth of the sector. In fact, your next job might be with a co-op. Co-ops are counter-cyclical, they boom when the economy busts, which despite the record highs of the stock market, is what’s happening for far too many people.
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