In our world of crappy low-paying jobs, high rents, high prices for things we need and shoddy banking practices it can seem like something is wrong with our economy. Many people turn to various political ideas on how to fix it, ranging from supporting an increased welfare state to wanting less regulations on businesses. However, these approaches all depend on voting and politicians, are process which (if we assume they are honest and don’t break election promises) can take years. If you want to make your economic situation better right now, it might be worth taking a look at the concept of a cooperative.

Cooperatives are “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”[1]. Basically, they’re a group of people who use collective power to achieve better results. They exist in every country but the average person often has no idea what they are.

To give a brief history, cooperatives became really popular in Europe and North America at the dawn of the Industrial Revolution. It turns out having your land stolen, working for low wages in a smelly factory with a high rate of death isn’t very popular. Members of the working class would pool their money together to purchase their own factories, workshops, housing, banks or stores and organise them in a way for their own benefit.

A photo of the Rochdale Society of Equitable Pioneers, a consumer cooperative founded in 1844. They have played a key role in the history of cooperatives. Photo from Rochdale Pioneers Museum.

There are five main kinds of cooperatives, they are worker cooperatives, housing cooperatives, consumer cooperatives and financial cooperatives.

Worker Cooperatives operate like a regular business, purchasing various materials on the market, processing them and selling them to customers. The difference is that there isn’t really a boss, decisions are made by all in meetings, people put things to a vote (often striving for consensus) or alternatively choose a boss for situations that require it. What to do with the profits made from their activities are decided by the employees. They might choose to let everyone get a pay raise or invest more in machinery. A great deal of research has been done on these, and generally reveal that worker cooperatives are superior in every measurable metric to regular businesses, from productivity, worker happiness and pay.[2]

The logo of the Amul cooperative. Amul is one of the largest cooperatives in the world with 3,600,000 members (this is larger than any military or corporation). Amul was the main lead of India’s White Revolution, which turned India into the world’s largest milk producer. Photo from Wikipedia.

Housing Cooperatives own real estate which their members live in. There isn’t a landlord, and the only payments that are made go into things like loan payments, taxes, repairs, utilities and amenities wanted by members. Housing cooperatives can be anyone from 15% to 50% cheaper than regular housing in the same area.[3][4]

Housing Cooperatives in Manhattan, New York City viewed from Central Park. They are known as (from left to right) ‘The Majestic’, ‘The Dakota’, ‘The Langham’ and ‘The San Remo’. Accessed from Wikipedia.

Consumer Cooperatives (Sometimes called Friendly Societies) involve the use of collective purchasing power to buy directly from producers, this allows people to buy goods without the added costs associated with regular shopping. Consumers cooperatives are active in the area of utilities, food, clothing, tools, medicine and insurance. Sometimes, the costs at a consumer cooperative can be twelve times cheaper than regular businesses.[5]

A consumer cooperative supermarket in New Zealand, accessed from Beautiful Solutions Aotearoa.

Financial Cooperatives (Sometimes called Credit Unions) take savings and give out loans to businesses and consumers, they use the profits to give a greater return to the saving’s holder and themselves. Just like any bank. The difference is that the loans given out generally have a lower interest rate and a higher rate of return for savers, this is because the middlemen and profit motive have been cut out.

Crédit Agricole, a French financial cooperative with a revenue of €30.427 billion and assets worth over a trillion. Photo from Wikipedia.

People have dreamed of a better world as long as there have been people. History is filled with blundered efforts at created a better society which ended in disaster. Yet cooperatives have proved themselves to not be subject to this failure, thus they may be the key for a better future.

Sources:

[1]- https://web.archive.org/web/20120204081503/http://www.ica.coop/coop/principles.html

[2]- https://www.uk.coop/resources/what-do-we-really-know-about-worker-co-operatives

[3]- http://www.uwcc.wisc.edu/pdf/coopHouse02.pdf

[4]- https://www.youtube.com/watch?v=Xsbih_3Rrdo

[5]- http://www.freenation.org/a/f12l3.html