Cooperative Alternatives to the Capitalist Meltdown: An Economy Based on One Person, One Vote

As our mainstream financial institutions are failing us, it's time to start thinking about more creative solutions than "bailouts" to restore national financial security and prosperity. There are alternative, self-regulating economic models to a free-market economy which still allow for private citizens to make decisions about how and where monies should be invested or spent. They are called cooperatives.

The cooperative business model has enjoyed success for more than 150 years, and is currently utilized throughout the world to bring economic and democratic empowerment to the communities that it serves. There has never been a more appropriate or necessary time to develop a more cooperative economy.

One of the fundamental differences between cooperatives and other investor-owned businesses lies in the driving force behind our purpose. Both types of businesses are typically for-profit enterprises, but in a cooperative, our first responsibility is to run a business that will meet the needs of our member-owners.

It's our job to make available the goods and services that our members want and need, and this is the mechanism that drives decision-making in the everyday life of a cooperative.

Contrast this idea with the mechanism for decision-making in our corporate counterparts: Is it going to help the business turn a profit? Needs for goods and services will be met only if those needs help maximize the bottom line, and if they don't, the odds are good that your needs are going to fall by the wayside.

What would our national financial picture would look like now if folks had chosen to finance their mortgages through their credit unions, or chosen to join or start housing cooperatives, instead of turning to Fannie Mae and Freddie Mac? Would the housing market have become over-inflated if mortgage lenders had been focused on meeting needs before turning profits? Next, consider who the owners of a cooperative corporation might be, and how a co-op divvies up the pieces of the ownership pie. The owners of a cooperative are its members -- the individuals who use the goods and services of the co-op, and who invest their equity and their patronage in the business.

They're you and me. They're our friends and our neighbors and the people we do business with every day. But our advantage as a cooperative is that we have mechanisms in place to ensure that all co-op member-owners are equal investors in our businesses. When it comes time for members to make decisions, all members get one vote, regardless of the number of shares we each might own. This idea protects equality and democracy.

Compare it to the idea of one-vote-per-share, which has no mechanism in place to guarantee that the concerns or ideas of the individual with the single share or the shallowest pockets will get any air time in the boardroom. Imagine how different the marketplace would look if our national wealth was equally owned and controlled by collectives of individuals, rather than bestowing ownership based on individual collections of wealth.

In cooperatives, the accountability circle is also more accessible. Since most co-ops are locally or regionally based, the odds are good that the directors are neighbors, people you work with or have other social relationships with. They are real people that you might have the opportunity to interact with on a daily basis. If you have an idea or a concern, you can leave a message or a note in the board's mailbox, or attend one of our monthly board meetings.

Consider some of the other advantages of local ownership and control that cooperatives can offer to the communities that they serve, particularly when we are looking at a sagging national economy. By design, profits have to remain invested in the cooperative in one fashion or another, in order to benefit the cooperative as a whole. This allocation can take the form of investing in equipment, services, or staff that can help to improve the quality of the goods and services a co-op offers to its members, or they can be returned to members in the form of a refund or dividend.

The co-op business model has proven itself to be a stable and successful alternative to the mainstream. The British Columbia Cooperative Association estimates the survival rate for co-ops after 10 years in the marketplace is 46 percent, compared to 20 percent for private firms. That's the kind of relative financial success that is really only possible when the individuals who invest in a business have the opportunity to exercise democratic, shared, and equal control in an institution working for the benefit of the co-op as whole.

Ponder the cooperative possibilities. Prosperity is possible, in every business sector, if we remember that together we can do what we could not do alone.