Everything for Everyone

Introduction

Equitable Pioneers

My maternal grandfather came into the world just north of Johnstown, Colorado, in 1916. It’s a place of high, dry plains under the Rocky Mountains, which stretch far off along the western horizon. On cassette tapes recorded a few years before his death, he and my grandmother bicker about those days. She’d come from Lincoln, Nebraska, and, like my grandfather, was the child of German-speaking migrants whose ancestors had lived for centuries in Russia’s Ukrainian conquests. She complains that his parents were hard and cruel for not keeping him in school longer than it took to learn reading and some math. He fires back, not kindly—saying you can’t apply “modern standards” to the way it was then and there, when he slept with his brothers year-round in an open lean-to on the sugar-beet farm where the family tenanted, no heat or light at night except what scarce wood could provide. My grandparents were about the same age, and of the same peculiar ethnicity, but town and country then were two entirely distinct worlds.¹

Modern standards eventually came to the farms around Johnstown, but not inevitably. Although cities like Lincoln had electric lights by the time my grandmother was born there, electric companies had no interest in stringing power lines to dispersed farmhouses. Electricity arrived only in the 1940s with the expansion of the Poudre Valley Rural Electric Association—a company organized and owned by its customers, set up with financing through the Rural Electrification Act, which President Franklin Roosevelt steered through Congress in 1936. Poudre Valley REA is still running, still a cooperative, and is an aggressive adopter of solar farms. It’s part of a resident-owned grid that delivers power to about 75 percent of the territory of the United States.

As a teenager, my grandfather moved in with his older brother in Greeley, where he started working at an auto-parts store. He made extra money connecting power lines to German-speakers’ farms and selling them their first washing machines. After a wartime spell in the army, he began a career as a roving hardware-store manager, then as an executive, and finally, as the director of Liberty Distributors, which became one of the larger hardware firms in the country during his tenure.

Liberty’s members, and my grandfather’s bosses, were regional hardware wholesale companies; together, they bought saws and sandpaper and other goods that would be sold in local stores and lumberyards. Each member company held one share and one vote, and members split any surpluses. It was a co-op. Since the onslaught of big-box chains, it’s mostly thanks to co-ops like this that the small hardware stores my grandfather loved can persist at all. Perhaps the co-op model helps solve a family mystery, too—how Grandpa managed to build a national company without becoming especially rich.

Liberty did about $2 billion in business annually in today’s dollars during the early 1980s, serving three thousand or so stores. The company’s mission, according to the company handbook, was to fulfill its members’ “continued desire through a cooperative effort to meet with the economic pressures facing each business.”² It also allowed a more flexible arrangement than the conformity expected by other co-ops such as Ace Hardware. But, like them, its job was survival.

Liberty is not the only co-op I’ve encountered in my family’s past. When I take a ride in a nearly automated tractor with one of my grandfather’s nephews, who still farms near Greeley, he tells me about how he brings his sugar beets to Fort Morgan for processing. He is a member of the Western Sugar Cooperative, a descendant of the same Great Western Sugar Company that brought our ancestors to Colorado after they arrived at Ellis Island in 1907.³ Thanks to the co-op, he keeps up the old family crop.

Nobody told me when I was growing up that this particular way of doing business had so much to do with our family history. Why should they? Why would the kind of company matter?

More than a century later, here I am. I was raised back east, lived on both coasts, and then wound up moving—returning—from New York City to Colorado with my wife and our unborn son, who would enter the world an hour’s drive from the nameless spot where my grandfather did. Compared to what it was in his time, Colorado is another kind of place, a land of ski resorts and hydraulic fracturing and tech startups. Cooperative business shores up the area’s burgeoning affluence—the mortgage-lending credit unions, the babysitting time-banks, the consumer-owned REI stores for skiwear and climbing gear. High-country electric co-ops helped plan out some of the famous resort towns. But Colorado is still a place where people have to create an economy of their own to get by. When I take a ride with an East African driver-owner of Green Taxi or meet a child-care co-op member who speaks only Spanish, I remember my grandfather’s immigrant parents a century earlier.

It wasn’t investigating my family history that put me on the lookout for cooperatives. I started looking because of stirrings I noticed as a reporter among veterans of the protests that began in 2011, such as Occupy Wall Street and Spain’s 15M movement. Once their uprisings simmered, the protesters had to figure out how to make a living in the economy they hadn’t yet transformed, and they started creating co-ops. Some were doing it with software—cooperative social media, cloud data, music streaming, digital currencies, gig markets, and more. But this generation was not all lost to the digital; others used cooperation to live by dirt and soil.

The young radicals turned to the same kind of business that my buttoned-up, old-world, conservative grandfather did. Following them, I began following in my grandfather’s footsteps before I even knew it.

Both he and the protesters professed principles derived from a small group of neighbors in mid-nineteenth-century Britain—the Rochdale Society of Equitable Pioneers. These Equitable Pioneers were mostly weavers working too hard for too little in textile mills, and they set up a store where they could buy flour and candles on their own terms. Equitable co-ownership and co-governance were practical tools for accomplishing this task. Through their democracy, they cut costs, ensured quality, and spun the threads that would help stitch together a global movement. But any movement can fray with time. Each generation has needed its own equitable pioneers. And these pioneers, I’ve learned, can leave marks far beyond their neighborhood stores.

Co-ops tend to take hold when the order of things is in flux, when people have to figure out how to do what no one will do for them. Farmers had to get their own electricity when investors wouldn’t bring it; small hardware stores organized co-ops to compete with big boxes before buying local was in fashion. Before employers and governments offered insurance, people set it up for themselves. Co-ops have served as test runs for the social contracts that may later be taken for granted, and they’re doing so again.

This book is a sojourn among the frontiers of cooperation, past and present—cooperation not in the general sense of playing nice, but in the particular sense of businesses truly accountable to those they claim to serve. It’s about the long history and present revival of an economy in which people can own and govern the businesses where they work, shop, bank, or meet, sharing the risk and the rewards. These represent a parallel and neglected tradition that runs alongside the usual stories we tell ourselves about how the world as we know it came to be and what is possible there. New cooperators are rearranging this tradition into inventive, networked guises, as if the future depends on it.

Cooperative enterprise can be as old as you want it to be, and a lot of the basic ideas go back as long and far as human economies in general. I’ll offer a partial history in the coming chapters, told through the eyes of those reliving pieces of it now. This history carries evidence, from one century to another, that people can govern their own lives, if we give ourselves the chance. Cooperation is tradition and innovation, homegrown yet foreign to the ways of the world around it. It’s part of my family’s story, and it’s a new generation of equitable pioneers. It’s like the French peasant-prophet Peter Maurin used to say about things of this sort: “A philosophy so old that it looks like new.”⁴ It’s a philosophy whose discreet return I’ve had the chance to witness and document, a philosophy of utopian trouble and dull practicality, a philosophy carried out over and over, yet one that we habitually forget or outright deny we are capable of fulfilling. Well, we are.

It’s really not so surprising that I didn’t grow up knowing of my grandfather as a cooperator. After World War II, in a United States still reeling from the labor struggles of the 1930s and fearful of communist revolutions abroad, an implicit deal was struck: democracy would be for the voting booth alone, not the boardroom. Law and culture concurred. Most large co-ops that persisted—Liberty Distributors among them—did their best to blend into the corporate order. Vulnerable as they were to Red-baiting, democratic businesses cast themselves as good-old American capitalism.⁵

This strategy, however, meant forgetting part of why those co-ops were created in the first place. The social reformers at work during my grandparents’ youth had a habit of invoking the vision of a “cooperative commonwealth,” an economy made up of interlocking but self-governing enterprises, which put control over production and consumption in the hands of the people most involved in them. Those people would choose what to produce, how to do it, and what to do with the profits. The commonwealth, and the gradual, evolutionary process of getting there, offered an antidote to the authoritarian tendencies then ascending on the right and the left; for six-time Socialist Party presidential candidate Norman Thomas, writing in 1934, “the only effective answer to the totalitarian state of fascism is the cooperative commonwealth.” Farmers had been setting up purchasing and marketing co-ops for decades to counteract the power of urban industrialists. W. E. B. Du Bois, meanwhile, was documenting and celebrating the commonwealth among the “communal souls” in African American cooperative businesses.⁶

All this rested on a faith that ordinary people could choose their destinies. One of the most memorable slogans from the labor struggles in those days was a saying of child-laborer-turned-organizer Rose Schneiderman: “The worker must have bread, but she must have roses, too.” If “bread” was the buying power of wages, “roses” was the right to the free time that came from reasonable working hours—time for enjoyment and self-management. Schneiderman said those words in a 1912 speech to a room of a few hundred wealthy women in Cleveland. Women’s suffrage was the immediate subject and crusade of Schneiderman’s speech, but to her, the ballot meant more than voting for politicians every few years. It was the key to a commonwealth. Her organization during that period, the Women’s Trade Union League, regarded “self-government in the workshop” as an overriding demand; the momentary struggles over hours and wages and suffrage were a means to that end. The International Ladies’ Garment Workers’ Union, for which she had also worked, pursued the commonwealth by organizing co-owned apartments for its members.⁷

Serious businesspeople nowadays tend to regard any alternative to the investor-owned corporation as aberrant or impossible. But the alternatives actually preceded the models that prevail today. In Britain, the first legislation for co-ops passed four years before joint-stock companies got their own law in 1856. Legal scholar Henry Hansmann has suggested that we regard investor-owned companies as a distorted kind of cooperative, bent in service of investor interests over anyone else’s.⁸ The kind of business that now seems normal was once strange; someday it might seem strange again. Perhaps the strangeness is creeping back.

Surveys suggest that something like 85 percent of workers worldwide don’t feel engaged in their jobs. As a stopgap, consultants teach corporate managers to instill the fictional “sense of ownership” that so many people want to experience in their economic lives—for employees, and consumers as well. The internal website for Walmart “associates” is MyWalmart.com; “It’s your store,” Albertsons supermarkets used to tell their customers. Harvard Business School’s Francesca Gino, among others, has documented productivity benefits when employees experience “psychological ownership.” A pair of former Navy SEALs turned executive coaches preach “extreme ownership.” But keeping up this facade is hard work, especially when it has no relationship to reality. It could be more efficient to set up at least a partial ESOP, or employee stock-ownership plan. Partial employee ownership, as at Southwest Airlines or W. L. Gore, is a long-standing tradition in US business, but even that rarely comes up in the management lit.⁹ Strange indeed. Why does it seem so hard to take the desire for genuine participation seriously?

As I began encountering the new cooperative frontiers, I learned to notice remnants of past and partial commonwealths still at work around me. When I travel now, I see them fly by everywhere, points of interest missing their commemorative plaques. In the most drab of parking lots, I look around and there they are, dotting the strip malls. These traces of commonwealth have begun to seem like a secret society, an inverted reality lurking inside what claims to be reality, economies that reject the rules by which the economy supposedly plays. In these traces, even tucked within competitive markets, cooperative advantage holds its ground.

Each example pokes a hole in the usual story about how the world came to be as it is, challenging tall tales about progress made from competition and the pursuit of profit. No, there have been other principles at work.

Pass a Best Western hotel or a Dairy Queen or a Carpet One on the highway—can you see the purchasing co-ops built into their franchise models? How about in an antique store that doubles as a sales office for State Farm, still a cooperative-like mutual owned by its car-insurance policyholders? In a Whole Foods Market, and even its adopted parent, Amazon, perhaps there are still ghosts of the organic food co-ops that helped create the demand Whole Foods feeds on, and that it then swallowed. Are there traces left in Burley bike trailers, passing by on the shoulder, of the days when that company was worker owned? As I’ve driven by the King Arthur Flour factory in Vermont, or Publix grocery stores in Florida, or the New Belgium brewery in northern Colorado, I see some of the more than fourteen million US workers who benefit from an ESOP.¹⁰ Pass a cluster of solar panels in farm country, and chances are it delivers power to members of the area’s cooperative electric utility, financed by a hundred-billion-dollar cooperative bank in a city many miles away. Pick up a local newspaper in a diner, and half its heft is wire stories from the Associated Press, a co-op since its founding before the Civil War. The rusty grain silo in a farming town, the laundry service for my region’s hospitals, a brutalist credit union building I pass every day—co-op, co-op, co-op.

The International Cooperative Alliance calculates that the largest cooperatives globally generate about $2.2 trillion in turnover and employ about 12 percent of the employed population in G20 countries. As much as 10 percent of the world’s total employment happens through co-ops. According to the United Nations, the world’s 2.6 million co-ops count over 1 billion members and clients among them, plus $20 trillion in assets, with revenue that adds up to 4.3 percent of the global GDP. The country with the largest total number of co-op memberships—though many members don’t know themselves as such—is the United States, home to more than forty thousand cooperative businesses.¹¹ A national survey found that nearly 80 percent of consumers would choose co-ops over other options if they knew they had a choice.¹² I’m still learning where and how to notice them.

Portions of the commonwealth have trouble noticing each other, too. The worker-owners of an urban house-cleaning co-op might not recognize the cowboy cooperation of ranchers buying feed together, or the hackers sharing cooperative servers while pounding away at their code. A fair-trade spice distributor and a worker-owned mental-health center have offices next door to each other in my town, but they’ve never talked with each other about being co-ops. With practice, the commonwealth appears. Some of the big, older co-ops have even started displaying their cooperative identity again, as something to be claimed rather than hidden. Whether they admit it or not, they’ve each turned to democracy out of need.

Economist Brent Hueth finds that cooperatives arise most often when there are “missing markets,” when the reigning businesses fail to serve an unmet demand or utilize latent supply.¹³ While coffee companies ran a race to the bottom in environmental and labor practices, co-ops engineered a fair-trade movement that went the other way, from the worker-owned roaster Equal Exchange to consumer-owned grocery stores and countless grower co-ops around the world. When competing banks needed to collaborate with each other more reliably, they formed Visa and the SWIFT network as cooperatives. Democracy can be creative and flexible where top-down models fear to tread.

Still, cooperation remains a minority logic in the global economy, and the kinds of hopes that today’s equitable pioneers stumble toward are anything but inevitable. Authoritarian, neo-feudal tendencies have found fresh appeal in many quarters; surveys suggest that, worldwide, the desire for democratic politics is on the decline. Young people in the United States increasingly consider democracy—as they know it, at least—a poor way to run a country.¹⁴ Cooperatives themselves have fallen victim to this. Many large credit unions, electric co-ops, mutual insurance giants, and the like have lost the kind of member involvement that they had at their founding, and managers find it just as well not to remind their members that they are, in fact, co-owners. The result is stagnation, usually, or sometimes outright graft. If the world is forgetting its capacity for democracy, the co-ops are, too.

When politicians talk about spreading democracy, they typically have in mind an expansion to more and more countries, forcibly or otherwise, of representative governments and accompanying political rights.¹⁵ But democracy might spread in forms other than ballot boxes. It can spread like Schneiderman’s roses into ever more hours of our days, into our workplaces and markets and neighborhoods, and into what becomes of the wealth we generate. It can start to take root in levels of the social order where it was previously absent. Otherwise, democracy becomes a spectator sport—as real, and yet as out of reach, as reality TV.

When tech people talk about “democratizing” something, like driving directions or online banking, what they really mean is access. Access is fine, but it’s just access. It’s a drive-through window, not a door. Access is only part of what democracy has always entailed—alongside real ownership, governance, and accountability. Democracy is a process, not a product.

Apple’s Orwell-themed 1984 Super Bowl commercial presented the personal computer as a hammer in the face of Big Brother; later that year, after Election Day, the company printed an ad in Newsweek that proposed “the principle of democracy as it applies to technology”: “One person, one computer.” The best-selling futurist handbook of the same period, John Naisbitt’s Megatrends, likewise promised that “the computer will smash the pyramid,” and with its networks “we can restructure our institutions horizontally.”¹⁶ What we’ve gotten instead are apps from online monopolies accountable to their almighty stock tickers. The companies we allow to manage our relationships expect that we pay with our personal data. The internet’s so-called sharing economy requires its permanently part-time delivery drivers and content moderators to relinquish rights that used to be part of the social contracts workers could expect. Yet a real sharing economy has been at work all along.

During the 2016 International Summit of Cooperatives in Quebec, I attended a dinner at the Château Frontenac, a palatial hotel that casts its glow across the old city. Quebec City has an especially well-developed commonwealth; many residents can recount a typical day with a litany of one co-op after another—child care, grocery stores, workplaces, and so on. We heard from Monique Leroux, then president of the International Cooperative Alliance, the sector’s global umbrella organization. A selection of Canada’s legislators, government ministers, and foreign emissaries rose in turn as the emcee announced their names and titles. Among them were cooperative managers from every corner of the world, dressed the way the establishment was supposed to dress before the rise of startup bros and hedge funders, enjoying a meal worthy of the lavish benefit dinners I used to attend as a freeloading guest in New York City. Their credit unions and farm co-ops and wholesalers represented a non-negligible chunk of the global economic order. And though these cooperative titans personally claimed spoils lower than those of their peers in investor-owned conglomerates—maybe a few hundred thousand dollars a year rather than many millions—the ironies of any establishmentarian gathering were present there, too.

Keith Taylor, a co-op researcher at the University of California–Davis, texted me from the United States: “i imagine youre seeing a lot of lip service for members and communities… w/no representation.” Pretty much.

Ironies and all, the fact of that elegant dinner bore a revelation. Most of the younger cooperators I’d been among the past few years, working in isolation and starting from scratch, didn’t know a gathering like this was possible. The scene in Quebec was a reminder that the cooperative movement—even its most bureaucratic participants refer to it as a “movement”—is no theoretical or utopian phenomenon. I met directors of co-ops from around the world owned by their workers, their farmers, their depositors, their residents, and their policyholders. They brought many languages and many sorts of formal dress. As a group, they had little in common except a set of agreements held and honed over time about how to make cooperation work in an acquisitive world.

The International Cooperative Alliance first met in 1895 in London. The principles it would adopt to define and guide the international movement derived from the rules that the Rochdale Pioneers set out for themselves in 1844. These principles have evolved over the years. The most recent list, approved in 1995 by the ICA and framed on the wall in the boardrooms and kitchens of co-ops the world over, are these:

Alongside the principles, in its materials on “cooperative identity,” the ICA promulgates a list of values that inform the principles’ meaning: self-help, self-responsibility, democracy, equality, equity, and solidarity.¹⁷ Much resides in these principles and values; their meanings will unfurl in the pages to come. I’ll refer to them again. They’re a monument as much as they’re a method. They’re violated as systematically as they’re followed across the ever-partial global commonwealth. And yet they’re a moving, beating heart.

The arteries and veins of the cooperative idea are participation and control. Those who use an enterprise should be those who own and govern it. It’s not just a vessel for absentee speculators. When participants are owners, the firm becomes worth more than what an owner can extract from it. A co-op’s members might be individuals, or businesses, or other co-ops, but in any case the model invites them to come as their whole selves. They have the freedom to seek more than profit.

Co-ops of any substantial size hire staff to manage the day-to-day, but for big decisions or board elections, the rule is one member, one vote. Investor-owned companies give greater control to those who own more shares, but a cooperative counts its members according to their solidarity, not their investment. As co-owners, they’re all on the hook for how they govern. The enterprise stands or falls by how they direct it. Thus the fifth principle—the part about education.

This kind of responsibility calls for a lifetime of learning about the particulars of the business at hand, toward the wisdom that self-management requires. Co-ops are supposed to constantly equip their members with the knowledge and skills they need to be good stewards; they are also expected to broadcast their mission and model to the public beyond. In this and much else, co-ops can team up. The sixth principle enjoins them to align their efforts through federation and collaboration, turning their cooperation into an advantage in competitive markets. Finally, because a co-op’s owners are the people who live where it operates, they have every reason to care how it affects their communities. The community is not an externality, it’s part of the business.

These principles are a series of feedback loops. Each is meant to reinforce the others to produce viable businesses that serve their members and the common good. But they’re not a guarantee of anything.

The commonwealth has stalled in areas and industries where it once thrived. A gulf separates the generations that built much of its past and the newcomers trying to reinvent a commonwealth for themselves. The newcomers conjure up experiments with Bitcoin but don’t bother voting in their local credit union’s election. And the credit union’s management may actually prefer it that way; when I asked my own credit union’s CEO if he would like to see more than the handful of members who come to the annual meeting, he said credit unions aren’t like that anymore. To vote in my mutual car-insurance company’s annual meeting, I still have to send in a request by physical, mailed letter to an address tucked away in fine print.

For people to use their power, they have to remember, or be reminded, that they have it or could have it in the first place. As much as co-ops arise out of economics, they depend on a supportive, nourishing culture from below and enabling policy from on high. They depend on a democracy that is dexterous, not fixed and frozen in time. Their lifeblood is participation and commitment. Yet the values and principles amount to nothing if there isn’t a solid basis in business.