African Americans have been pioneering co-ops as an economic strategy since the days of slavery. Author Jessica Gordon Nembhard on how centuries-old models can guide our economy today. Why you can trust us By Keane Bhatt 15 MIN READ

Editor’s note: Jessica Gordon Nembhard is a professor of community and social economic development at John Jay College (CUNY), and the author of “Collective Courage: A History of African American Cooperative Economic Thought and Practice.” She spoke with Keane Bhatt of The Next System Project, about the tradition of black cooperative economic development and what the Civil Rights movement can teach us about system change. The Next System Project is a movement exploring genuine alternatives and new models that can move us toward a more equitable and sustainable system. What follows is an edited transcript of their conversation.

Keane Bhatt, The Next System Project: Thank you for speaking with us. I was really excited to talk to you, because it seems that your intellectual and scholarly trajectory maps toward system change. Could you tell us a bit more about that trajectory, and how you began to tackle system-level questions?

Jessica Gordon Nembhard: I came from a family that was dedicated to social justice—a family that was very involved in trying to make social and economic change. And I felt like people didn’t know enough about economics, and that the economists that were out there had a kind of tyranny over the standard models and weren’t allowing other models to come out. So I decided that I was going to study economics and figure out where the inroads were to make economics liberating, as opposed to being constraining and exploitative.

So as I started studying economics, I became interested in international development and finance capital, because I realized that finance was one of the major areas contributing to inequality and supporting the current system. And that was my specialty coming out of my Ph.D. But then I started looking at domestic economic development, and economic development in black communities. I started looking into actual alternatives, particularly for community economic development. That’s when I focused my work on how to do real, community-based economic development that meant community-owned, community-initiated, real grassroots democracy, and prosperity for all—democratic community economies.

That’s also where I came across cooperatives as a model, and discovered that they have actually been used throughout all centuries, and by all kinds of groups. It wasn’t really just a European thing or what European immigrants did in the U.S., but was something that all groups have practiced and worked on, sometimes just for survival, but sometimes also with a larger vision in mind for how they could really change society and bring prosperity to the whole group.

“Instead of letting the conquerors tell the story, let the people who have been doing these collective survival strategies tell the story.”

Nembhard: So the long history is really, unfortunately, a history of exploitation, where the stronger (which in the case of economics means the richer) people who already have endowments or resources (or stole them) have used those resources to reinforce their own position at the expense of everybody else.

Bhatt: How does your deep grasp of history inform, and in some ways upend, the dominate worldview created by standard economic theory? And what does the history tell us about human interaction, economics, and motivations?

Nembhard: So when we look at history, particularly the economic and social history around thinking about that systemic issue, we see that two things happened. While the powerful are gaining more and more power over the centuries, they’re also leaving holes and gaps so that the people who are exploited are figuring out at least small ways to do alternatives. Even if we take enslaved African Americans as an example–people who didn’t own their own bodies, didn’t own their labor, weren’t paid—were totally exploited. Yet, on the one day they had off, on Sunday, they would farm small gardens together. Some actually hired themselves out if they had skills. They found alternative ways to make sure they could feed their families and have some dignity.

And often they did it collectively, by helping each other. If they were farming, they shared the produce. They taught each other how to read, even though it was illegal. They would save money to help each other buy their freedom. And there are lots of other examples. Serfs in Europe, for instance, were also doing their small stuff locally.

So one of the things we understand in history is, even though the bullies and the powerful kind of win, there’s all this other activity under the radar that’s still happening because human beings are human beings, meaning they work together, and they help each other, and care about each other. And so, the ability for us to raise that, sort of the lions telling history instead of (maybe the lions isn’t the best example, but that’s the term we use) the lions telling history instead of humans or hunters, right? Instead of letting the conquerors tell the story, let the people who have been doing these collective survival strategies tell the story. Then we understand that we actually have all the models, that they have worked, but that they’ve just been suppressed. And when we see that there are other models that can work, we then can see what we can do now and, into the future, how we could make them work, and how we can try to make them the dominant models.

Cover of a report on economic cooperation edited by W.E.B. Du Bois in 1907.

Bhatt: Could you talk a little bit about the history of system thought and economic development thought amongst black intellectuals, particularly W.E.B. Du Bois and the others you mention in your book, Collective Courage: A History of African American Cooperative Economic Thought and Practice?

Nembhard: Sure. Du Bois and others, though I guess Du Bois is kind of the main feature. He’s also the way I got into this, but there were also people like A. Philip Randolph and Ella Jo Baker and Fannie Lou Hamer—a lot of people who aren’t even considered big thinkers or intellectuals, but who seized upon this and understood it. But Du Bois said (well, many things, but one of the things he said) about economic inequality and economic progress is that if we look at African Americans, we’ve been forced to be segregated. And because of that forced segregation, it actually gives us an opportunity to look inward more, look to ourselves for the things that we need, use our own resources, create our own power, create our own economic systems. And then if we want to then integrate, we can integrate from a position of power.

So his notion was we need these collective, cooperative structures first within the race, because that feeling of solidarity—like we’re doing it for our families, for our race, for our people—is one way to get people to contribute to economic development in that way. Especially since it’s an alternative model that, in the mainstream, doesn’t have a lot of clout. So how do you get people to engage? One way, as we keep saying, is due to necessity. But Du Bois was also saying: Let’s not do it just to survive, but let’s do it as a strategy to prosper and to give ourselves a place in the larger economy as equals with other people.

“Let’s not do it just to survive, but let’s do it as a strategy to prosper…”

He actually started calling that idea the group economy notion. I’ve been connecting it to some of the other notions of solidarity economies and the use of solidarity in, say, the Mondragon system in Spain with the Basque people. They also had a notion of needing to help their own communities, since nobody else was helping them. That’s why I also talk about a subaltern and cooperative economic development strategy, because I believe all subaltern or marginalized, oppressed people actually, when they think about it, can not only consolidate their own culture and strengthen it, but can also create an economy that will work for them, especially in the face of economies and systems that don’t work for them.

I don’t think a lot of people followed through on Du Bois’ notions, but I think they were motivated to at least do small things. He was talking like this mostly in the 30s and 40s, sometimes through The Crisis magazine, sometimes through speeches and other writings. He definitely had people who at least would go back home and try to start a co-op. There were groups like the Young Negroes’ Co-operative League in the 30s that actually believed that young black people could help create a national movement that would start locally, but then consolidate black economic power into an interlocking cooperative system that could then actually produce some prosperity for blacks.

The other aspect of this is that we really can’t make political or social progress without economic justice. And that’s where Fannie Lou Hamer comes in, in the 70s. She talked about how we tried getting voting rights and other basic civil rights, but when we did, they retaliated against us economically. So now we need to figure out how to become economically self-sufficient so that they can’t retaliate against us when we try to do our political and social action. So she also saw this notion that we really need an economic system that supports us with dignity, prosperity, and survival—cooperatives. We need to own our own land, grow our own food, control our own economy; and then from there, we can fight all the other battles and struggles.

Bhatt: I think what you just touched upon with Fannie Lou Hamer is very important. Here you have this widening, opening, more inclusive civil arena that’s over the decades being expanded. You have black CEOs in Fortune 500 and so on, so there’s inclusion at a very superficial level. Yet black wealth has either remained stagnant or declinined. Can you talk more about what has led to this divergence, and what that means for today?

Nembhard: So, to continue with the Fannie Lou Hamer theme: by the 70s people thought that the civil rights movement was pretty much over, right? We had voting rights now, some affirmative action, civil rights laws, etc. More and more blacks were able to get jobs that they previously couldn’t get. We even had a growing black middle class and a small black upper class.

Certainly where Fannie Lou Hamer was in Mississippi, you didn’t see it as much, but even there you had some changes. She was highlighting the frustrations and reminding us of the systemic issues that—even though things were looking better and there were a few individuals who were able to make it—the recent changes weren’t going to be enough. She really stepped back, especially from the voting rights issue, to say: We’ve got to own our own land, we’ve got to raise our own food, we’ve got to have affordable housing; and cooperatives are the way to do that. She developed the Freedom Farm Cooperative in order to provide those things.

Fannie Lou Hamer with members of the Freedom Farm Cooperative.

She did need to use money from philanthropy and donations in order to buy the property and that kind of thing, but she said: Look, it’s all kind of ephemeral if we don’t have these other structures in place that will really provide for the majority of people rather than minority of people. And it’s interesting because she really is saying something in the 70s that Du Bois actually said in 1907. And I won’t get the quote right, but he wrote in 1907 that we black people stand at the crossroads. We could either go the individual, capitalist route of letting some of us gain some wealth on our own for ourselves, and a few of us making it and being wealthy, and the rest of people being left behind; or we could take the other road of cooperative economics, where actually the whole society is moving together. We each are amassing some small pieces of wealth as a collective so that there is broad ownership and we’re all prospering.

And of course he said we took the wrong road, right? We’re at a crossroads, but it looks like we’re going towards that individualist, capitalist route, which is basically what we did. But we should have taken the other route. And I think that we’re at the same crossroads again. Actually, we’ve been at the crossroads many times. We keep taking the wrong route. But we have a chance to take the better route, to correct our route. We have the chance to go the cooperative way so that we don’t have a few people doing well off the backs of the rest. We can all prosper together. Especially as we are trying to recover from the Great Recession, we see the mainstream economy is not working for us. More and more people are starting to look for alternatives and are turning to cooperative ownership.

And we actually know how to do it. One of my pet peeves is that we keep thinking we don’t know what to do, but we do know because we have lots of models that have succeeded over the centuries, even over the last 20 years. There are lots of examples of cooperative solidarity economics that work, that deliver to people, that provide people a say, a piece, that operate in a business model that can make money for people. What we don’t have is enough will and enough education about how to do it. We also get bogged down in petty racial and gender problems in terms of not giving women their due, in terms of still having racial issues against African Americans and Latinos being able to be participants, that kind of thing. But we do know what to do. We just have to get over the ignorance and the—and I guess what I would call the white privilege people not being willing to give up their white privilege.

Bhatt: One thing that is very striking about some of your work is how you address the very tangible effect of white terrorism on black economic development. When we talk about things like slavery or redlining, it can seem very abstract. But when we really start to look at the great migration, it was not simply to find opportunity, but to flee from terrorism. Can you talk a little bit about that?

Nembhard: The research I conducted on the history of African American cooperatives and the cooperative movement among African Americans points to that fortitude, to that persistence that you had to have to follow alternative strategies. I actually named the book “Collective Courage” partly because of that, because it was actually physically, as well as economically, dangerous to participate in economic alternatives. And as you mentioned, the white terrorism or white supremacist violence actually surrounded almost every effort for African American co-op development. And I imagine it was probably similar for other groups as well.

There are lots of examples of cooperative solidarity economics that work, that deliver to people, that provide people a say, a piece, that operate in a business model that can make money for people.

The examples range. Some of the terrorism was physical, like physically beating and lynching people who were involved, or burning down the exchange or store, co-op building, or a member’s house. But it also was subtle economic terrorism in terms of getting banks to collude. No bank would give a loan or give a line of credit to a black co-op; insurance companies raising the premium on insurance for the co-op; rent skyrocketing in a gentrifying area. And we had that problem up into the 90s and really into the 21 st century, so it isn’t even necessarily a historic problem. African Americans were made to feel like they shouldn’t be pursuing this and that it was going to be against their interests. And sometimes they were harassed and intimidated into leaving a co-op or disbanding a co-op.

And yet, like with the Civil Rights Movement for political rights, African Americans continued to challenge that, to say we’re going to persist no matter what, to basically—I was going to say step over the bodies, but it’s not really stepping over the bodies, but stepping on top of the dead bodies to keep moving, and saying you can’t scare us away. Sometimes a co-op did go under because of all the sabotage, but often people persisted, and others followed. Sometimes they just changed the form or name and cropped up somewhere else. And sometimes the community defended the co-op.

And then often, even if a particular co-op went under, all of the different things that its members learned, the skills they developed, and the different strategies that they used to cooperate surfaced in other ways. They formed other kinds of businesses and enterprises. They were able to do other things economically. Sometimes, they even were able to integrate a union or enter into an industry that they hadn’t been allowed in before. And they asserted leadership in other endeavors and civic engagements. So there were lots of different ways that they ended up being able to succeed because they kept persisting.

When I first started doing this history, I learned that people weren’t talking about this aspect of co-op history, and didn’t really know about it. But then I also discovered that, at least at the time when they were creating these co-ops, most of them were using education. They were educating themselves. They were educating a larger population to make sure those co-ops worked. But they weren’t necessarily passing it onto their children overtly because it was so dangerous. So that’s the other piece. I think hopefully I’ve been able to break that silence. It’s not so dangerous for us to remember that history and for us to get strength from it.

Bhatt: Historically, what was the contribution of black women to the black union and cooperative movements?

Nembhard: In the black union movement, the role of black women was to keep things moving. Particularly in the progressive unions—and I really studied the Brotherhood of Sleeping Car Porters and the relationship of A. Philip Randolph with the head of the Ladies Auxiliary to the Brotherhood of Sleeping Car Porters, who was Helena Wilson from Chicago. black women also played this role in the black churches and in the black co-op movement.

From the beginning, the Ladies Auxiliary to the Brotherhood of Sleeping Car Porters, for example, had reading lists for members to learn about consumer economics and cooperative economics. Most of the union members were men, although the maids in the Pullman porter cars were also in the union. But the workers didn’t have that much time to organize, so the wives, who called themselves the Ladies Auxiliary, had the time to study and to talk about this connection. They organized themselves and their families to keep black dollars circulating in the black community and believed that consumer cooperatives were the way to do that.

It wasn’t enough just to get a good job. It wasn’t enough just to have union wages. What else were they doing with their money? What were they doing for their community? And that’s how they came upon cooperative economics, particularly consumer co-ops, to then recirculate this good money into the black community. So they studied how to do it, and formed credit unions and co-op stores. They talked about other co-op models to really keep the money circulating so that hard-earned labor money didn’t just go back into the corporatist economy. And that notion was really, again, coming back to that sense of a solidarity economy, and a way that we could use our own resources to create prosperity for ourselves and our communities.

“It’s not just because we put money in or how many hours of work we put in. It’s also about this energy and the connections made with other people.”

As I mentioned before, we have had these kind of things in every period. And in the 30s, 40s, and 50s, we got them through the Brotherhood. It’s also interesting that the Ladies Auxiliary ended up being connected to the wider labor movement. They were involved in the greater Chicago labor movement and co-op movement. They were invited to meetings. They were considered essential when Chicago was starting the Chicago Eye Cooperative. The white organizers of the eye clinic said that they couldn’t have started it if the Ladies Auxiliary hadn’t provided the energy and initial money for it. So black women cooperators also really were not insular, though that’s how they started. But they then actually branched out and became very instrumental to all the different pieces of the movement.

Similarly, in Washington, DC, Nannie Helen Burroughs, co-founder of Cooperative Industries of DC in the 1930s, was called upon by the mainstream DC branch of the Cooperative League of the USA (CLUSA) to give speeches and represent the group. And black women were instrumental in the mutual aid societies that were precursors to cooperative enterprises. So it’s interesting that, in every epoch, we have similar stories like that of black women’s leadership in the black co-op movement and in the mainstream white co-op movement.

Bhatt: What are some of the principles, values, and features that you would consider a priority for a ‘next system’? And what do you think are the existing pathways that are helping us to move in that direction?

Nembhard: The next system that I think we need, and that I think hopefully we’re moving toward, would be what I call a cooperative commonwealth and a solidarity economy. By a “cooperative commonwealth” I mean a system of interlocking cooperative ownership structures in all industries and all sectors of the economy, where co-ops supply each other and feed into each other and fund each other. And cooperative can be loose in terms of any kind of economic cooperation in a solidarity system. By “solidarity system”, I mean a non-hierarchical, non-exploitative economic system geared toward the grassroots that’s indigenous, participatory and that’s democratized a sense of capital.

Some people talk about David Ellerman’s term, where labor actually rents capital rather than capital renting labor. So capital is subordinate to labor in that sense, and returns go to labor. Risks are collectivized, skills are perfected, learning is continuous, and surplus is shared in equitable ways, through real democratic decision making. In a system of shared prosperity, shared decision-making, collective economic activity can spill over into other social and political spaces, and enrich civil society, families and individual wellness.

We do have examples of some of this. We have examples of sort of cooperative commonwealths where you have interlocking systems: a credit union that helps to develop worker co-ops and gives the first loan to the co-op store to buy its own building. And then the co-op store deposits its money in the credit union. And the credit union also helps the neighborhood to start a housing co-op. And the housing co-op members run their own security company and maintenance company as worker-owned companies that also service the credit unions and the co-op stores. The residents also have a co-op sewing factory, catering company, child care center, etc.

So that’s the kind of idea we have: that everybody is part of several different co-ops, which service each other and provide products and alternative financing. Some of the surplus from one co-op venture can then be put into something else, like affordable housing or other kinds of provisions, like collective utilities. So the notion is that we don’t really have any one group, or one person running off with all the spoils, right? The spoils are truly recirculating in the community. And the community itself is the one who decides what happens to those resources.

The spoils are truly recirculating in the community.

And then the final piece that I think is really important, and that we don’t talk about enough, is that resources don’t just have to be financial resources. It’s not just market relationships. Again, to quote Du Bois badly, he also said very early in the 1900s that African Americans could be at the forefront of creating intelligent cooperation that would dismantle the price system and set up an economy based on the common good, supporting the common good. And so this system that I’m trying to describe would not be so dependent on market forces and a price system, but would really be more about human need and human relationships – an economic cooperative ecology of caring community. This would include not just whether you bring capital to an economic venture, but what other resources you can bring.

One of my colleagues talks about social energy, which he says he got from Du Bois. And that’s where not just sweat equity—where you get equity because of the work you put in, the in-kind work—but also the social energy, which is the enthusiasm, caring, and the persistence that you put in to keep the project going; and the high quality of social interaction and support for your fellow cooperators. So much of the productivity in co-ops and some of its success actually is due to that kind of energy. It’s not just because we put money in or how many hours of work we put in. It’s also about this energy and the connections made with other people, and the way we work with people. Understanding that those are just as important as the financial contribution I think is another way to think about the new system, and another way to think about how we democratize capital. It’s about enthusiasm, caring, persistence, and concern for community. We need democratic, people-centered community-based, collective, sustainable economies that produce prosperity for all (while protecting mother earth).

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