Working Our Way to an Honest Economy

By Elizabeth Archerd, Member Services Manager

As we look toward economic recovery, let's consider how we can participate in speeding it along. After all, when major systems break down opportunities to build arise. Cooperatives are poised to be in the thick of putting the economy back together in a sustainable way.

What would a cooperative economy look like? It would be based on real products (ahem) and involve trade relationships based on mutual respect. We have 165 years of experience running cooperatives that are based on sound principles. Healthy co-ops also take the fundamentals of business seriously: pay bills on time, build a rational equity structure, deal in good products at fair prices, reinvest in infrastructure, build a rainy-day fund, set realistic expectations about earnings and do not distribute profit that has not yet been earned.

Relationships based on mutual respect would look much like the relationships between natural food co-ops and local producers. We don't nickel-and-dime growers for the lowest possible price. On the contrary, when new producers don't set prices correctly we don't take advantage of that. Instead, we educate them about how to set a "sustainable price" so that we can count on their products for a long time. Imagine the loss to our community if co-ops had not paid Gardens of Eagan enough for their corn and tomatoes thirty years ago. Likewise, Equal Exchange (a worker-owned co-op) does all its international and domestic trade based on Fair Trade principles, which are a natural fit for the co-op movement. Housing cooperatives, like the new Nokoma, provide an alternative model for home ownership.

People do seem to be getting the message about co-ops. Kevin Edberg, the Executive Director of Cooperative Development Services (CDS) in St. Paul, recently told me about how many calls he has fielded from across the country in the past six weeks. These include an investor-owned business that wants to join with businesses with similar waste streams to form a co-op to build a biomass energy generation facility. Another fellow wants to start a worker-owned temp agency for the unemployed. Home re-modelers are looking to form a purchasing co-op. A group of lawyers want to cooperatively organize a neighborhood legal clinic. Lutheran Social Service in Illinois is looking into forming a worker-owned cooperative to market the labor of former convicts. A group in Maryland is talking about developing an co-op to help homeowners save money on weatherization and energy-efficient appliances. He wants to make it possible for his model to replicate virally, so other communities can do the same thing.

We are now seeing a major credit union awakening. As large banks double and triple credit card interest rates for good customers, their soon-to-be ex-customers are flocking to credit unions. Credit unions did not offer sub-prime mortgages and they don't lure their members into permanent debt. Everyone from Ralph Nader to the business news on Fox are talking about the value of member-owned financial institutions.

Co-ops are looking at ways to work together, to keep the money from all our transactions in "the family" of businesses that exist to serve their members and communities. (That's why the Wedge teamed up with SPIRE to offer a credit card.)

Look for co-ops to be a major source of creative entrepreneurship in the years ahead.