The Potential of Multi-Stakeholder Cooperativism in the New Economy

Saturday, June 25, 2016: 9:00 AM-10:30 AM
56 Barrows (Barrows Hall)
Maurie Jeremy Cohen, New Jersey Institute of Technology, Newark, NJ
A number of policy ideas have been proposed in recent years to ameliorate the precariousness of contemporary economic conditions due to the stagnation of wages, the increase of contingent labor, and the dissolution of entire occupational categories. These strategies have typically focused on supplementing household incomes through non-labor sources—the provision of a universal basic income, the distribution of a “citizen’s dividend,” and the implementation of broad-based stock ownership in corporations. While such proposals warrant consideration, we need to acknowledge the political obstacles in most countries that are likely for the foreseeable future to stand in the way of far-reaching and substantive action toward their implementation. Given such circumstances, interventions that can be pursued without majority political support deserve attention and this paper highlights the concept of multi-stakeholder cooperativism.

Most advanced countries have long histories of worker and consumer cooperatives but the associated organizations have tended to develop along separate trajectories and to have little overlap or interaction. In an era of expanding economic insecurity there is a strong impetus to bridge this divide and to recognize the ultimate artificiality of the customary distinction between production and consumption. Multi-stakeholder cooperativism, founded on hybrid models of worker-consumer collaboration, could unite these two domains, overcome long-persisting fractures in the cooperative movement, give rise to new predispositions that treat buyers and sellers as allies rather than rivals, prioritize full-community solidarity over return on investment, and emphasize collective enhancement instead of value appropriation by distant inventors.

The paragon case of worker-consumer cooperativism is Eroski, a subsidiary of the venerable Mondragón Corporation headquartered in the Basque Region, which operates a chain of 800 supermarkets and hypermarkets and a variety of other businesses including gas stations, travel agencies, liquor stores, and perfume shops in Spain (and small number of additional establishments in France). At the other end of the spectrum are examples like the Weaver Street Market, a modestly sized worker-consumer cooperative in North Carolina that runs three retail stores specializing in organic produce and fair-trade products, and the Black Star Brewery, a pub in Austin, Texas that encompasses both workers and consumers in a unique cooperative ownership model.

While further diffusion of hybrid cooperativism could help to ease social and economic dislocation, numerous barriers exist with perhaps the most significant being the issue of institutional sponsorship. Two possible candidates to assume this role are labor unions and municipal governments.

First, it is unarguable that organized labor, especially in the United States, has been in retreat for the last several decades and its membership ranks have experienced serious erosion. At the same time, union leadership has over the years tended to keep its distance from the cooperative movement, preferring instead to focus on more traditional objectives such as collective bargaining. Nonetheless, there are indications that this long-standing chasm may be starting to narrow. Especially significant is that at the height of the Great Recession in 2009, the United Steelworkers, the largest industrial union in North America, entered into an agreement with the Mondragón Corporation to encourage establishment of worker cooperatives. One of the more salient developments to emerge out of this accord has been the Cincinnati Union Co-op Initiative (CUCI) launched in 2011. By early 2016, CUCI had incubated two worker cooperatives and one worker-consumer cooperative.

Second, municipal governments with a history of progressive politics provide a second source of potential institutional sponsorship of cooperatives. For instance, New York City established the Worker Cooperative Business Development Initiative in 2014 with considerable fanfare and the City Council allocated more than $3 million to support development of associated businesses and support services. The public funding received to date has been allocated to, among other things, a legal assistance center and an incubator for development of cooperatively-owned environmental businesses. Other cities—including Madison (WI), Minneapolis, and Oakland (CA)—have also begun to embrace cooperatvism as a way to enhance social inclusion and related policy objectives.

To be sure, these are extremely nascent developments and mutualism as a business model remains extremely marginal in most advanced countries. At the same time, policy makers and the general public tend to frame the unfolding economic transition in terms of inadequate employment, stagnating incomes, and inequality rather than the breakdown of conventional systems of household provisioning and the need for alternatives beyond the faltering options inherent in the business-as-usual economy. However, this conceptual understanding may change as the breakdown of familiar routines comes to be seen as inexorable.