In case you were living under a rock or in the United States of America, the United Nations dedicated the year 2012 as the International Year of the Cooperative. The slogan of this international year is “Cooperative enterprises build a better world.” So what exactly is a workers’ cooperative? They are member-owned businesses which are democratically run. This means members of the company have a voice in the trajectory of the business. Cooperatives focus on the community by creating jobs, lowering prices, alleviating poverty, and the abolition of general powerlessness in the work place. Cooperatives, like any business, can fail or succeed depending on their business practices. However, unlike the common capitalist goal, profit isn’t the driving factor of cooperative businesses. The three main stakeholders in these kinds of enterprises, generally speaking, are the consumers, producers, and the employees.
Cooperatives in the United States have over 800 billion dollars in assets and over 10 million employee owners. This new way of organizing labor in America is expanding due to the current economic crisis. But why haven’t we heard much about workers cooperatives in America, let alone the UN’s declaration? One could speculate that it doesn’t serve capitalist interest. Since the main goal of any traditional business is to make a profit, workers cooperatives don’t fall into this traditional mode of business. Therefore these kinds of cooperative businesses are discouraged in mainstream America because their focus isn’t solely on profits.
The biggest issue surrounding the current crisis stems from the ineffectiveness and incompetence of the financial sector. When Alan Greenspan testified in front of Congress he declared there was a flaw in his model which subsequently led to the financial sectors collapse. This flaw, which he overlooked was the belief that banks operating under self interest will self-regulate to protect their shareholders and institutions. However, this kind of thinking is wrong. Banks are propped up by the Federal Reserve and a “bought” out Washington. Their risky practices are encouraged by the current economic system and backed by Congressmen in Washington D.C. Therefore risks shouldn’t be considered risky at all. The only people who suffer from the banks’ failure are the citizens. Now countries have to swallow the bitter pill of austerity while the institutions which created the crisis rake in record profits and make demands as if 2008 didn’t happen.
The silver lining in this economic crisis is the growth in financial cooperatives and credit unions. These institutions are member owned and tend to be more risk aversive than standard capitalist banking institutions. Since banking cooperatives rely on member deposits, rather than easy capital from investors, they tend to retain profits and take less risks. The members of these cooperative institutions are directly involved with the lending risks of the bank, which also serves as the moral compass. When it comes to interest rates, cooperative financial institutions and credit unions have better rates than standard banks. Banks have to increase interest rates and levy fees on their consumers in order to compensate for their losses. This basically means that credit unions and financial cooperatives are meeting the demands of the market with good rates, more risk aversive practices, and outstanding customer service.
Of course this doesn’t mean that these cooperative banks aren’t facing problems as the economic atmosphere around them erodes. But with the focus being on the members, rather than distant shareholders, these institutions are better able to manage in times of crisis. Their stability has proven to be remarkable relative to their counterparts which have received trillions of dollars in bailouts all around the world.
There are alternate solutions to the current economic situation. The way capitalists organize labor in America and across the world, constitutes exploitation by a few elites profiting off of our hopes, sweat and tears. In a country which values democracy as the cornerstone to our success, why should it stop at the doors of our jobs? Our organization of labor is counterintuitive to freedom and the “American Dream.” With the ongoing assault on labor, workers still have the option to organize, but in a different way. Workers’ cooperatives are a great example. The traditional hierarchical capitalist structure and labor exploitation shouldn’t be our only choice for employment. The year 2012 was designated as the International Year of the Cooperative, but it shouldn’t stop there. Advocates of income equality, justice, peace, and humanity need to continue to push to educate their fellow citizens of the world in order to let them know there is another choice. Corporate CEO’s don’t have to record billions of dollars in profits while their employees collect pennies on the dollar. Democracy at work is a simple revolutionary idea which should be embraced by all those who want to see a new, fair and just world. There are alternatives, embrace democracy at work.