Carl Ratner is an academic cultural psychologist who studies the psychological affects of culture, especially macro, political culture. He was vice president of Northcoast Co-op Inc., the largest food co-op in California, and has published research on cooperatives.

Many people think of cooperatives as small, locally owned businesses, such as groceries, cafes, or bicycle shops, where people can work in an equal and participatory non-capitalist organization. In reality, the U.S. co-op movement is tied to federal agencies whose agenda is promoting neoliberalism, both domestically and abroad, and the co-op movement itself has neoliberal leaders. Many co-ops in name are profit-driven capitalist corporations in practice. And even in the abstract, the co-op principles of smaller co-ops enable neoliberal cooperative politics. All of this, however, raises the question of what a co-op based on socialist values would be, and China’s Nanjie village provides a living example of that.

The U.S. Co-op Movement’s Structure

At the top of the institutional structure of the U.S. co-op movement is the National Cooperative Business Association (NCBA). NCBA is the major resource center for the North American movement—although it is itself not technically a cooperative. It organizes webinars, seminars, conferences, co-op development services, the Cooperative Hall of Fame, the Cooperative Development Research and Resource Center, and regional co-op business associations. It penetrates deeply and intrusively into municipal co-op associations, in some cases controlling the executive director positions.1 NCBA’s reach extends even to establishing, advising, and administering rural co-ops in Africa.

But NCBA is not an independent association; it is heavily funded by the U.S. State Department through the U.S. Agency for International Development (USAID). NCBA’s Cooperative Development Research and Resource Center was funded by a $1.3 million grant from USAID, as are NCBA’s African co-op projects. USAID also funds other cooperative projects, such as one that assists national cooperative movements in developing countries in creating legal and regulatory environments.2

Where does USAID money come from? Its budget is part of the national security budget; USAID has an office called the Office of Civilian Military Cooperation, whose mission is to cultivate cooperation (with the Defense and State Departments) regarding development and security in humanitarian efforts.3 USAID in turn works under the military’s U.S. African Command (AFRICOM), and as the public face of the CIA in foreign countries. It contains an Office for Transition Initiative that promotes “regime change” in independent countries such as Cuba, Ukraine, and Venezuela.

USAID does assist with some cooperative development, just as it helps with some programs to bolster elections and reduce human trafficking in underdeveloped countries. However, this aid is always auxiliary to and accommodated with the broader, dominant focus of USAID: to promote corporate economic and political hegemony. For instance, the USAID program for strengthening the rule of law includes funding police departments in reactionary countries such as Paraguay.4

As an instance of the agency’s capitalist framing of cooperation it is useful to quote the statement by USAID’s Ethiopian mission: “We share the vision that cooperatives can grow to become efficient, professional organizations that operate like businesses and focus on profitability. For example, in terms of maize we are supporting several farmers’ cooperative unions in transactions with the World Food Program and with DuPont/Pioneer and the government to assist some 35,000 farmers to access training, high yielding maize seed and storage over the next three years.”5 In short, USAID’s “cooperative vision” is profit-oriented businesses who partner with the worst capitalist corporations.

In turn, NCBA endorses this neoliberal cooperativism in its public announcements; one press release enthused:

On August 9, 2009, United States Secretary of State Hillary Clinton presided over the signing of a Memorandum of Understanding between NCBA/CLUSA [Cooperative League of the USA], Chevron and USAID to continue to work together to assist Angola in diversifying its economy by revitalizing small and medium scale commercial farming. Secretary Clinton also recognized NCBA/CLUSA’s Chief of Party in Angola, Estêvão Rodrigues, for his leadership in implementing the Agriculture Development and Finance Project, which Chevron and USAID co-fund. 6

Co-ops Partnering with Chevron and USAID

Neoliberal capitalism is the antithesis of cooperation, yet NCBA, as the leading U.S. cooperative association, has endorsed Obama’s “Promise Zones.” The organization stated, “Initiatives that tackle poverty alleviation, such as Promise Zones, could be a prime example of collaboration between the Administration and NCBA CLUSA.”7 Yet these Promise Zones are free enterprise zones, a concept pioneered by Margaret Thatcher and Ronald Reagan, where the market reigns supreme.

This sends a powerful message to co-ops that neoliberal policies and practices are cooperative and should be adopted. This corrupts cooperation and misrepresents the nature of capitalism as cooperative and worthy of collaboration by co-ops. NCBA’s complicity with capitalist governments and corporations generates a corrupted, corporate form of cooperation that I call “neoliberal cooperation.”

All cooperation is a “mode of cooperation” that is associated with a specific mode of production. A mode of cooperation consists of social relations of cooperation, just as a mode of production is a particular set of social relations of production. A mode of cooperation has the same institutional, managerial, ideological, legal, political, and systemic organization that a mode of production has. Improving cooperation requires transforming it as a mode of cooperation and a mode of production.

The neoliberal mode of cooperation that is led by NCBA complements neoliberal political economy. It corrupts small, local cooperatives that participate in the system. For example, when they join online chats organized and moderated by NCBA (called “Co-op Talks”), or when they hire a co-op consulting group (e.g., Cooperative Development Services) to advise them, the information they receive is informed by the ideological and financial chain that extends upward from the consulting group to NCBA to USAID to the State Department. Michel Foucault explained this: “the great strategies of power encrust themselves and depend for their conditions of exercise on the micro-relations of power.”8

An example of the corrupted micropolitics of cooperation is the International Summit of Cooperatives that the International Cooperative Alliance (ICA) organized. The ICA, of which NCBA is a leading member, invited global corporations IBM, Microsoft, Google, and Ernst & Young to sponsor the event.9

The leadership of the Co-op Summit invited Ernst & Young (the accounting corporation that has been sued by New York’s attorney general for helping Lehman Brothers disguise its financial condition for more than seven years, while collecting more than $150 million in fees from the firm) into workshops. The company then utilized this experience to compose the pamphlet Enlightened Cooperative Governance: Balancing Performance with Broader Principles in Co-operatives and Mutuals. It defines co-ops as keeping pace with the capitalist economy:

… . Cooperatives and mutuals that want to remain competitive need to leverage the components of an agile governance structure. To stay competitive, co-ops and mutuals need to be able to quickly adapt to evolving market trends. The board of directors therefore needs to be agile enough to make rapid business decisions—like acquiring a competitor or investing in the latest technology—all the while taking the time to listen to its members and maintaining member proximityCooperatives and mutuals that want to remain competitive need to leverage the components of an agile governance structure. 10

The result is a co-op that works in, and for, a capitalist economy: “In pursuing enlightened governance, co-ops and mutuals can inspire confidence in the marketplace, elevate their status and reputation as solid and unique business entities, and contribute to building competitive economies and cohesive communities.”11

Co-op invitations to sponsor and define the highest, global summits of co-op policy acclaim criminal corporations as trusted allies of co-ops. In turn, these invitations allow corporations to present themselves as cooperators.

The capitalist framing of cooperation, that the co-op leadership enables, filters down to all levels of the movement. The Canadian Cooperative Research Network listed Ernst & Young’s corporate approach to enlightened co-op governance on its web page under “articles of interest.” Not a critical word about Ernst & Young appeared in the notice.

The National Cooperative Business Association and Producer Co-ops

NCBA is heavily involved with producer co-ops that function as capitalist corporations. Land O’Lakes dairy co-op is a case in point. Land O’Lakes produces animal feed, as well as seeds and crop protection products including herbicides, pesticides, and fungicides. Land O’Lakes dairy co-op has a subsidiary, Forage Genetics International, that developed Roundup Ready alfalfa in conjunction with Monsanto!12 These are the seeds that Land O’Lakes sells to its thousands of farmer cooperators. GMO seeds are not only ecologically and nutritionally destructive, they reinforce the political economy of private agribusiness that concentrates agricultural ownership of resources in exclusive, anti-cooperative corporate hands.

In 2012, Land O’Lakes dairy co-op issued a policy statement: “We oppose any efforts by EPA to regulate emissions of greenhouse gases under the Clean Air Act…. We oppose the Chesapeake Bay TMDL requirements proposed by EPA that would require Chesapeake Bay states to aggressively constrain [farming] discharge and pollutant load allocations to farmers.”13

NCBA rewarded these activities by inviting Land O’Lakes to co-sponsor the 2012 Induction Ceremony of the NCBA-affiliated Cooperative Hall of Fame.14 NCBA also inducted Land O’Lakes, Inc. President and Chief Executive Officer John Gherty into the Cooperative Hall of Fame—seven years after the company released its genetically modified alfalfa.

Here we have the nation’s paramount cooperative business association endorsing one of the worst corporate destroyers of sustainable agriculture as one of the best co-ops.

NCBA also performed the same mystification with the National Rural Electric Cooperative Association (NRECA). It represents more than 900 rural cooperative utilities in forty-seven states, with a combined national membership of more than 42 million customers. NRECA’s new president and CEO is Jo Ann Emerson, a former Republican Congresswoman from Missouri. While in Congress, her votes included: voting for John Boehner as House Speaker; supporting the Keystone XL pipeline; balancing the budget by cutting government services; extending both the Patriot Act and Bush’s tax cuts; voting in favor of amendment S. 1927 to the Foreign Intelligence Surveillance Act (that gives U.S. spy agencies expanded power to eavesdrop on foreign suspects without a court order); voting to repeal health reform; and voting to prohibit Congress from funding National Public Radio. According to one website, she voted in favor of just 12 percent of progressive legislation, but 52 percent for conservative legislation.15

This is who leads the 42 million members of NRECA.

NRECA focuses upon its bottom line of obtaining cheap fuel to produce electricity. Its main fuel is coal, so NRECA lobbies heavily in support of producing and burning coal and oil. It lobbies against environmental regulations, thereby aligning it with conservative legislators.16 The group has lobbied in support of the Keystone XL pipeline, and to rein in the Dodd-Frank financial reforms to regulate speculative banking and investment.17

NCBA is proud of NRECA and its executives, such as Executive Vice President of External Affairs Martin Lowery. In 2009 Lowery was elected chairman of the board of directors of the NCBA, after having served as its first vice-chairman. In November 2013, NCBA executives nominated him for the board of directors of the International Co-operative Alliance (ICA). The same month he was appointed to the board, bringing his neoliberal orientation to it.18

Furthermore, in 2014 NCBA partner, the Cooperative Development Foundation, inducted Lowery into the Cooperative Hall of Fame—”the cooperative community’s highest honor.” There he joined neoliberal, anti-cooperative compatriots from Land O’Lakes and other corporate co-ops. (This is akin to the Los Angeles NAACP giving its lifetime achievement award to Donald Sterling, the racist owner of the Los Angeles Clippers basketball team. He was given the award in 2009 and the local NAACP was planning to award him again in 2014, before his racist comments against blacks were recorded and publicized.) Last, Lowery is also a board member of the National Co-op Bank, bringing his neoliberal perspective to that institution as well.19

Abstract Cooperative Principles Enable Neoliberal Cooperative Politics

Co-ops are vulnerable to cooptation because they lack a political philosophy that can guide genuine cooperation and counter non-cooperative influences.

Consider the definition of a co-op, as codified in ICA’s 1995 “The Statement on the Co-operative Identity.” A cooperative is defined as “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.” Co-operatives “are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of co-operative founders, co-operative members believe in the ethical values of honesty, openness, social responsibility, and caring for others.”20

Almost all of these descriptors (with one exception) characterize all voluntary groups, including the Girl Scouts and corporations. To wit, a corporation is a voluntary organization; nobody is compelled to become a shareholder. Corporations practice open membership: anyone can buy shares. Founders and investors meet their common economic, social, and cultural needs and aspirations through a jointly owned enterprise. Founders and investors unite in solidarity to meet their needs. Corporate members and managers engage in self-help to actualize their aspirations: they make their own business plans, hire staff, buy equipment, and finance their projects. Share-holders decide on by-laws for their voluntary organization. They are autonomous in making these administrative decisions. Corporate law stipulates that corporations act honestly and openly. They are subject to audits to ensure transparency. Every corporation has some system for remunerating investors in proportion to their financial support for the enterprise. This is equity. And corporations are socially responsible in the sense of creating jobs and donating money to communities and political organizations. In these ways, corporations meet the definition of a cooperative!

This comparison reveals that co-op principles are actually general principles of voluntary association, not a cooperative collective. Furthermore, there is nothing particularly cooperative about these specific co-op principles and definitions. Individuals with different, and often inegalitarian, views can independently join an autonomous co-op and vote for community-based directors who run a lawful, audited, socially responsible food store but this does not entail cooperation.

Formal Economic Democracy Is Not Cooperation

The significant difference between co-ops and corporations in political-legal terms is that corporations allow one individual to have multiple votes according to the number of shares owned, whereas co-ops practice equality of voting rights, with each member only allowed one share and one vote. However, this principle is inadequate to generate cooperation in combination with the other principles. Producer co-ops fulfill the co-op principles, including economic democracy, yet they do not practice genuine cooperation.21

Economic democracy of one shareholder one vote is formal equality of ownership and decision-making; however, it entails no substantive cooperative content about how production and distribution are organized. This is evident in the way that Michael Albert, a major advocate of participatory economics (parecon), defines a new economy: “Participatory economics proposes a small set of institutions that define the heart of a new type of economy. These institutions are conceived to further various values: self-management, solidarity, diversity, ecological sanity.”22 Clearly, there is no socio-economic-political content to democratic decision-making, solidarity, diversity, and ecological sanity. Nor is there any reason that simply working and voting together should necessarily produce even these abstractions.

Economic democracy is neither a mode of production, nor a mode of cooperation. Regardless of whether it takes a purely political form or is extended to economics via co-operatives, democracy—if viewed solely in terms of voting rights as in contemporary capitalist society—is merely a formal decision-making process, altogether devoid of substantive content. It does not necessarily generate humane or cooperative outcomes of decisions.23 Equal owners may decide to implement anti-cooperative practices—as voters in political democracies vote against their own interests. Equal owners may vote to maintain commodity market production and distribution that subverts cooperation.24 Equal owners may vote to enact a right-wing, leaderless, laissez-faire system of individual autonomy rather than a planned, cooperative, socioeconomic system. Economic democracy is necessary for cooperation and socialism, but it is not sufficient to realize them.

Albert himself reports poor outcomes in Argentina’s “recovered enterprises” (empressas recuperadas).25 Albert met with fifty workers from several factories who had gathered together: “One man said: ‘We took it over. We were so excited. We made our wages equal. We instituted democracy. We had a workers’ council. We made our decisions democratically. And after a period of time, all the old crap came back. All the old alienation came back, and now it just feels the way it used to feel.’ And they were all [tearfully] saying it, person after person was saying it.”26 Democracy—in terms of equal voting rights—is necessary, but not sufficient, for cooperation. It occasionally enables cooperatively oriented people to practice cooperation; however, it does not necessarily foster cooperation. Democracy, in these terms, is an abstraction that must be concretized with specific cooperative content.

Advancing Cooperation

Genuine cooperation requires a detailed, comprehensive mode of cooperation, and mode of production. It is not simply who formally owns and governs resources and enterprises. It is socio-economic relations of producing and distributing goods and services.

To be truly fulfilling and viable, cooperation must concretely analyze and negate capitalist impediments to cooperation. In other words, cooperation must be qualified and concretized as socialist cooperation. Similarly, economic justice must be qualified and concretized as socialist economic justice, and economic democracy must be socialist economic democracy.

A Chinese Village Cooperative

A socialist cooperative politics is sprouting in some village-scale cooperatives in China. These are on the order of Robert Owen’s vision of cooperative villages such as New Lanark and New Harmony.

The brightest example is Nanjie in Henan Province.27 It is two square kilometers and has 3,000 people from 850 households. The entire village is a legal entity (corporation) that includes six cooperative corporations which oversee twenty-six enterprises. It is led by a twenty-one-person leadership team, made up of nine Chinese Communist Party (CCP) officials, plus village leaders and corporate leaders. Some of the leaders are simultaneously members of county-level congresses and CCP organizations. The President of Nanjie is Wang Hongbin, the local CCP secretary. He heads the multi-million dollar Nanjie Village-Cooperative-Corporation, yet only takes $37 as a monthly salary and receives no bonuses. Village government agencies supervise the corporations, village finances, schools, utilities, police, and social services. All the land, resources, and enterprises are collectively owned by the villagers, who elect the leadership.

In the 1970s, Nanjie was poor and backward. It grew an abundance of wheat, yet there was not a single large wheat mill in the area. CCP members borrowed money from their relatives and friends and built a mill on credit from a construction team. It was completed in 1979 with a daily output of twenty tons. Later, the mill signed a fifteen-year contract with a pastry factory in Peking to ensure continual sales. In 1985, the mill started its own pastry production.

In 1976 the only non-agricultural asset in the village was a medium-sized kiln for brick making that lay unused and inoperable. However, the villagers needed bricks to build new houses; they raised funds to revive the brick works by having people pay in advance for bricks they ordered. This raised $43,000, and in 1981 the brick works commenced production. By 1991, Nanjie was the wealthiest village in Henan, generating $20 million in sales.

The welfare system provided all villagers, including those who were self-employed, free water, electricity, coal, housing, and meat during the Spring Festival, Lantern Festival, Mid-Autumn Festival, and New Year. All the distributions were rationed according to family size, i.e., need.

The collective village deployed part of its income to build furnished apartments for the people. From 1992–1997 they moved out of their houses into free apartments that were assigned according to the family size. Members of different ethnicities and village teams lived in common buildings. Younger people were assigned to upper floors and older people to lower floors due to their limited mobility. Each apartment is equipped with the same quality furniture, appliances, and central air-conditioning and heating. All villagers receive monthly distributions of necessities, including meat, vegetables, spices, drinks, cooking oil, and snacks. The village also provides funerals and weddings, education, and medical care! For serious diseases that the village clinic cannot treat, the village pays for its citizens to travel to large cities to get free care. The village pays for college tuition outside the village, and living expenses, and travel expenses to get there. The village also provides free nursing homes for the elderly where they receive free food, lodging, entertainment, and medical care.

All villagers are guaranteed a job, but they are free to leave and return to the village at any time. Several enterprise managers left to start their own businesses elsewhere, but all of them failed in the competitive, market economy, and so they returned to Nanjie to take management positions.

Many benefits are allocated according to need, not according to means (whether work skills or monetary savings). Inequality is largely eliminated through minimizing commodification of goods and services, and distributing them instead on a humanitarian basis of need. If you have a large family, you need and receive larger housing. If you are sick, you need and receive extensive medical care. Monetary means are not a measure of benefits. Indeed, each villager gets roughly the same $50 salary regardless of job.

Gearing production and distribution according to human need eliminates market economics. A group plan is formulated based upon the needs of the members. The group then works to satisfy member needs. And members work to advance the group which utilizes the collective product to satisfy member needs. Your food, utilities, housing, medicine, and education are not allocated on the basis of your money, intelligence, or the amount of time you have worked. Your provisions are provided to you by the group simply because you are a group member. This is true egalitarianism because the group treats every individual as an equally worthy person—regardless of individual competencies. This is universal human respect and human rights. (Quid pro quo, in contrast, disrespects individuals of limited competencies and limits their social rewards accordingly. Universal human rights are a parody in market economies.)

Genuine cooperation transforms the ideas of justice and fairness. It changes from an individualistic quid pro quo exchange of rewards for work, to a collective notion of rewarding effort for the group. Rewarding individuals equally for different amounts of work is fair if they all work the best they can.

Consequently, there is no need to calculate the value—i.e., exchange value—of work, intelligence, strength, and products. (There may be other reasons to measure time and intelligence and knowledge—such as to match social activities to people’s interests and skills so that the activities will be more satisfying and so individuals can be more accomplished and fulfilled in their activities. However, this is not measurement of exchange value—how much a skill is worth in the sense of exchanging it for something of monetary value.) Market exchange based on exchange value is eliminated by production and distribution on the basis of need.

This way of addressing need replaces the egoism and instrumentalism of the market. You do not work in order to get something for yourself that you sell in order to obtain education or medicine. You get education and medicine because you need them and the group wants you to meet your educational and medical needs directly. The group figures out how to collectively meet your needs through arranging certain kinds and amounts of work. Human need is collectivized, in contrast to the commodity market which individualizes and privatizes need and makes it a personal concern that is fulfilled through personal resources.

Collectivized need ties the individual and group together. Individualized/privatized need separates the individual from the group. The cultural psychology of need—the manner in which need is organized and addressed—is thus central to societal organization and understanding. Concrete needs are elements of a political-economic mode of production.28

The social organization and treatment of need defines a mode of cooperation. Cooperation always exists in a concrete form—or mode of cooperation—that is grounded in a particular mode of production, or the form in which production is organized.

Nanjie recognizes that new policies and relations do not immediately eradicate socialized habituses.29 Villagers carry over anti-cooperative habituses until they have been discredited, re-mediated, and replaced. During this transition period individuals are in need of self-reflection and evaluation by others to check on and correct sedimented habituses that impede new policies and relations. Nanjie villagers are evaluated by their supervisors on scales measuring traits such as cooperation, motivation, and punctuality. Infractions are punished by a graduated reduction in welfare benefits according to the number, seriousness, and recurrence (intransigence) of infractions one commits.

From Hou’s research, Nanjie appears to have initiated a more advanced and humanitarian form (level) of cooperation (i.e., a “truer” form) than Western co-ops. Nanjie cooperation is a concrete, counter-capitalist form of collective ownership, production, distribution, fairness, social support, and human need. It is a mode of production that minimizes market economics, instrumentalism, and egoism. It repels capitalist content and transforms it. This is socialist content that is necessary to realize the potential of egalitarian ownership for genuine cooperation.

This is what is missing from ICA’s abstract principles and abstract economic democracy. Western co-ops as a rule maintain the commodity economics, politics, and psychology of the status quo within their co-op principles. They accept supply and demand economics, and quid quo pro economics that relies upon individual wages instrumentally to satisfy individual needs. This complicity with the anti-cooperative status quo prevents egalitarian ownership (one member, one voter) from realizing genuine cooperation.

Nanjie is additionally superior to Western co-ops because it is an entire village. This integrates numerous, diverse, complementary activities and institutions into a large, cooperative unit. It also links to the administrative and economic power of local, regional, and federal government to coordinate and fund local activities and institutions. This overcomes the localism of Western co-ops. Finally, being integrated into the national political system has the potential to make cooperation a national social philosophy that is reiterated, studied, and disseminated in schools, workplaces, and government agencies. The CCP could play an important role in developing the socialist political economy of village co-ops. Western co-ops have no socialist political association or direction that can provide this kind of direction. They only have NCBA and ICA to guide them.

Nanjie is a cooperative model that warrants consideration as a direction for cooperators to pursue.30 Nanjie may be a bellwether of Marx’s comment:

If co-operative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if united co-operative societies are to regulate national production upon a common plan, thus taking it under their own control and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production, what else, gentlemen, would it be but communism? 31

Of course, that would require a general movement toward socialism and communism in Chinese society. Neither socialism nor cooperation can exist in a single communal village cooperative. China’s market reforms may undermine Nanjie and other socialist, village co-ops—and a socialist nation state. However, Nanjie has already been instructive for cooperative development in countries that can strive to pursue its telos.

Notes