A revival of the cooperative economy in the U.S. and in the UK

Excerpted from Gar Alperovitz in Yes magazine:

(original has many links)

At the cutting edge of experimentation are the growing number of egalitarian, and often green, worker-owned cooperatives. Hundreds of “social enterprises” that use profits for environmental, social or community-serving goals are also expanding rapidly. In many communities urban agricultural efforts have made common cause with groups concerned about healthy nonprocessed food. And all this is to say nothing of 1.6 million nonprofit corporations that often cross over into economic activity.

For-profits have developed alternatives as well. There are, for example, more than 11,000 companies owned entirely or in significant part by some 13.6 million employees. Most have adopted Employee Stock Ownership Plans; these so-called ESOPs democratize ownership, though only some of them involve participatory management. W.L. Gore, maker of Gore-Tex and many other products, is a leading example: the company has some 9,000 employee-owners at forty-five locations worldwide and generates annual sales of $2.5 billion. Litecontrol, which manufactures high-efficiency, high-performance architectural lighting fixtures, operates as a less typical ESOP; the Massachusetts-based company is entirely owned by roughly 200 employees and fully unionized with the International Brotherhood of Electrical Workers.

A different large-scale corporation, Seventh Generation—the nation’s leader in “green” detergents, dishwashing soap, baby wipes, tissues, paper towels and other household products—has internal policies requiring that no one be paid more than fourteen times the lowest base pay or five times higher than the average employee.

In certain states, companies that want to brandish their new-economy values can now also register as B Corporations. B Corp registration (the “B” stands for “benefit”) allows a company to subordinate profits to social and environmental goals. Without this legal authorization, a CEO could in theory be sued by stockholders if profit-making is not his sole objective. Such status ensures that specific goals are met by different companies (manufacturers have different requirements from retail stores). It also helps with social marketing and branding. Thus, King Arthur Flour, a highly successful Vermont-based, 100 percent employee-owned ESOP, can be explicit, stating that “making money in itself is not our highest priority.” Four states—Maryland, Vermont, New Jersey and Virginia—have passed legislation that permits B Corp chartering, with many others likely to follow.

Cooperatives may not be a new idea—with at least 130 million members (more than one in three Americans), co-ops have broad political and cultural support—but they are becoming increasingly important in new-economy efforts. A widely discussed strategy in Cleveland suggests a possible next stage of development: the Evergreen Cooperatives are linked through a nonprofit corporation, a revolving loan fund and the common goal of rebuilding the economically devastated Greater University Circle neighborhoods. A thoroughly green industrial-scale laundry, a solar installation company and a soon-to-be-opened large-scale commercial greenhouse (capable of producing about 5 million heads of lettuce a year) make up the first of a group of linked co-ops projected to expand in years to come. The effort is unique in that Evergreen is building on the purchasing power of the area’s large hospital, university and other anchor institutions, which buy some?$3 billion of goods and services a year—virtually none of which, until recently, had come from local business. Senator Sherrod Brown is expected to introduce national legislation aimed at developing Evergreen-style models in other cities. (Full disclosure: the Democracy Collaborative of the University of Maryland, which I co-founded, has played an important role in Evergreen’s development.)”

And this report in The Guardian reports UK cooperatives have increased their turnover by 25% since the 2008 meltdown:

Heather Stewart:

“The annual report from Co-operatives UK, to be published this week, shows that while big players such as the John Lewis Partnership and the Co-operative Group have been performing strongly, a new generation of smaller, grassroots organisations has also grown up.

Co-operatives UK highlights the examples of Seven Hill Farmers, a group of lamb producers on the North York Moors who banded together after the foot-and-mouth disease crisis to get a better price for their products, and Energy4All, which works to establish community-owned windfarms to generate local energy.

Villagers are taking over local shops and pubs to rescue them from closure; football fans are setting up their own clubs in an effort to return the sport to its roots; and credit unions are stepping in where the big banks fear to tread. Between them, Britain’s co-operatives now have almost 10 million members, and their turnover in 2010 was £16.1bn, up from less than £13bn in 2008.

Ged Holmyard of the Edinburgh Bicycle Co-operative, which was founded in the 1970s and now owns a chain of stores, says worker ownership creates a special kind of culture.

“From the start, the ideology of our founders was that a workers’ co-operative was an intrinsically good thing,” he says. “It gives everyone a stake in the business.” If the shops have had a good year, every employee in the company gets the same cash bonus, and the ratio between the highest- and lowest-paid workers is five to one – much lower than in most firms.”

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