A few weeks ago, I was sitting around drinking a nice cold one while thinking of ways in which I could better society. How can we move our society to be more democratic and socially just ? In different words, how can we build socialism without the aid of the state? That is when the ideas started to flow. So many came, in fact, that I decided to write an ongoing series on how we can build better communities, cities, and nations, which I am calling “Building Socialism.”The first entry in the series is about cooperatives and why you should join/start one!
So what is a cooperative? Well, a cooperative is a business or organization created by individuals who voluntarily cooperate for their collective economic, social and cultural benefit. These are often legal entities that are governed by a one-person, one-vote democratic structure. This principle contradicts the idea that an individual’s input on the direction of an organization should be based on the amount of capital that person has invested.
There are different types of Co-ops and they are defined by who runs and own them. Some co-ops are own by those who use their services, like credit unions, and are called consumer co-ops. Others are owned by the workers themselves and these are called worker co-ops. Housing co-ops are owned and run by those who occupy a particular structure. Practically, any business that exist in the private sector could operate as a cooperative.
So why should you join/start or work for a Cooperative? Well here is a short list provided by the U.S. Small Business Association on the benefits of being a part of a Co-op:
- Less Taxation. Similar to an LLC, cooperatives that are incorporated normally are not taxed on surplus earnings (or patronage dividends) refunded to members. Therefore, members of a cooperative are only taxed once on their income from the cooperative and not on both the individual and the cooperative level.
- Funding Opportunities. Depending on the type of cooperative you own or participate in, there are a variety of government-sponsored grant programs to help you start. For example, the USDA Rural Development program offers grants to those establishing and operating new and existing rural development cooperatives.
- Reduce Costs and Improve Products and Services. By leveraging their size, cooperatives can more easily obtain discounts on supplies and other materials and services. Suppliers are more likely to give better products and services because they are working with a customer of more substantial size. Consequently, the members of the cooperative can focus on improving products and services.
- Perpetual Existence. A cooperative structure brings less disruption and more continuity to the business. Unlike other business structures, members in a cooperative can routinely join or leave the business without causing dissolution.
- Democratic Organization. Democracy is a defining element of cooperatives. The democratic structure of a cooperative ensures that it serves its members’ needs. The amount of a member’s monetary investment in the cooperative does not affect the weight of each vote, so no member-owner can dominate the decision-making process. The “one member-one vote” philosophy particularly appeals to smaller investors because they have as much say in the organization as does a larger investor.
If all the people in America worked for and used Co-ops, we would have a much more socially and economically democratic country. The workers, regardless of the type of work they do, would own their means of production and have more control over their lives. Another benefit would be the reduction of income inequality in our society, which would be awesome! So I highly encourage you to support your local Co-op whether it be a grocery store, bar, or restaurant. If you have a trade and have been considering going into business for yourself, start a cooperative. You have the power to make positive change by doing the stuff you are already doing, but in a smarter and more socially conscious way.