We live in a time on the cusp of socio-political revolution. Our leaders lie and cheat their way into power only to use that power for their own personal profit. As we continue to hear in the news some reach for violence as a solution. But, violent revolutions have always resulted in new plutocrats, not the abolition of plutocracy. I join with others in calling for a revolution of consciousness. But what does that even look like? This is the first in a series of articles that aims to answer that question.
From a very, very early age, I thought it was strange I was subject to the laws, customs, and regulations of this country simply on the contingency of being born here. To my young self executive authority could only be legitimate if authorized by the subject to that authority. Those who came before me had authorized their subjectivity, not mine. As you might expect, this did not go over well with my parents. Fortunately this discussion never came up with law enforcement.
Still, I ended up agreeing to this odd social contract simply by not actively pursuing a new system. What would a new system be anyway?
Consider the opt-in agreement. For example, by creating this Steemit account, I have agreed to the TOS. This is the standard model under capitalism. There’s nothing particularly revolutionary about opting in.
Now consider simultaneously being subject to an organization's authority while having a piece of that authority yourself. This is the standard model of cooperatives, mutuals, credit unions, and the like, which as a whole I have termed decentralized collectivism.
A mutual insurance company is wholly owned by its policyholders. This means that the policyholder is simultaneously the customer and investor. Like a corporation, decisions are still made in the best interest of the investors. Unlike a corporation, the investors are the customers. Profits come back to them, usually in the form of annual dividends. Generally, the employees are also customer-investors. So, all decisions are made in the best interest of everyone involved by everyone involved.
At my credit union, by keeping always keeping $25 in one account I am investing in it. This gives me the right to vote on business decisions. As you can imagine, there are very few fees placed on customers because that would be self-cannibalization. Instead, the credit union, as an entity, makes money by investing that initial $25 into financial products.
Many may have heard of a worker’s co-op grocery. While that does tend to help workers in similar ways to a union, I have seen 3 such grocery chains come and go in my city. There is, in fact, a better system—a customer co-op grocery. I briefly lived in the college town of Athens, Georgia that has such a grocery. Daily Groceries caters to health-conscious consumers, mainly selling organic, non-GMO, minimally processed, local foods. Of course, these kind of foods are sold where I currently live as well. Unfortunately, the masses can’t afford to shop there. But, like other co-ops Daily Groceries makes decisions in the best interest of its customer-investors. While I lived in Athens there were two ways one could invest in Daily.
① For a one-time payment, one could become a full-share investor. This gave the benefits of discounted grocery prices, voting privileges, & annual dividends. For those who couldn’t afford a full-share investment, one could still invest by paying ⅕, ⅖, ⅗, or ⅘ shares. These investors still obtained discounted prices & held equal voting privileges, but did not start receiving annual dividends until their full share had been paid.
② Rather than investing currency, one could invest time in Daily Groceries. By working part time, one received the same discounted prices that members received. Workers did not, of course, receive dividends. I don’t happen to recall if workers could vote.
It seems that Daily Groceries have changed their membership structure in the years since I moved away. The PDF of their current membership handbook can be viewed here. There are many other ways a grocery co-op can be structured. Besides this singular example of a customer/member co-op there are: differently structured customer/member co-ops, worker co-ops, producer co-ops, and purchasing co-ops.
Housing co-ops turn rent into equity. Most housing co-ops start as apartment complexes or large houses that are subdivided. Housing co-ops can also be created between multiple buildings on a block, but I’ll stick to the easiest example. Pretend there is a small apartment complex with 12 equal size units. These units come together to form a cooperative. Each unit has equal voting power. Some co-ops form in such a way that each person has an equal vote, but in this example each housing unit will be the smallest divisible portion.
Each unit continues to pay “rent,” perhaps paying $50 more than previously. Instead of payments going to a landlord, it goes to the co-op, the treasurer of which then makes monthly payments toward the housing loan. Many housing co-ops, utilize a credit union for said loan. The remaining money—the above mentioned $50—goes into a fund for maintenance and improvements. Once the loan is paid in full, housing co-ops generally vote to reduce payments. Regardless, all money collected at this point goes toward improvements.
Let’s say our example co-op pays off the home loan and agrees to use their improvement fund to install solar panels. The group has utilized their collective capital to remove the electric bill of all 12 units compared to a single-family home which must take out a loan for solar panels. Tenets of co-op housing also benefit by sharing other resources. For example, they might purchase high-speed internet which is then shared by each unit, thereby reducing their individual monthly ISP costs.
Then there are tool libraries & makerspaces. Isn’t it odd that each family in a neighbourhood has their own toolbox? Some may casually toss a couple screwdrivers and tape into a drawer while others shell out for multiple multi-drawer tool cabinets, circular saws, and a lathe. Reasonably those who have invested more into their tools are going to be more protective of them. But does it really make sense for every household to own a hammer? Tool libraries and makerspaces are another form of co-op. By investing annually members get access to any available tools. They also must sign a membership agreement. These contracts prevent any improper use of the tools. A violation results in the member having to pay for replacement parts or tools. This prevents Lloyd’s tragedy of the commons.
The main difference between these two similar organizations is that a member of a tool library will check out, take home, use, and return the tool. This can be anything from a spanner—or wrench—to a riding lawnmower. Members end up spending less than nonmembers with the added benefit of higher quality tools.
Members of makerspaces tend to be craftsmen rather than tool users. Membership costs more than at a tool library with the benefit of having industrial quality tools and workbenches. Not only does this bring the cost of something like a 3D printer down to an affordable level, but it also provides a space outside the home to work on projects. Makerspaces often also hold workshops. Besides providing education to members and the public alike, these can also be a great source of cheap or free advertising. As makerspaces and tool libraries have a lot of capital invested in their tools, typically members are held to a high standard of conduct.
The above examples share important key values: rejection of a centralized authority structure; investment by customers; regulation by and for customer-investors; subjugation to authority is voluntary and opt-in only, thus limiting coercion; workers’ are self-managed; little or no internal hierarchy; direct democracy; lowering individual costs without lowering product or service quality; low or no risk of tragedy of the commons; rewarding individual cooperation while simultaneously rewarding collective competition; maximizing individual liberty while minimizing concentration of power, thus limiting corruption total possible reach.
Another compelling argument for the creation of these kinds of institutions is that they can interact with the system currently in place. Co-ops, credit unions, and mutuals compete with corporations. Corporations, I argue, inevitably grow too big to fail. As corporations increase in size, their costs, as a percentage, go down. Simultaneously, profits for investors go up. All the while executives weigh short term gains over long-term sustainability. After all, in all likelihood they will be working at another firm in the next five years anyway.
Cooperatives, on the other hand, reward sustainable decisions. That which is best for the investors is usually best for the customer and is always best for the co-op as a whole. Cooperatives tend to look decades down the road as most board members tend to retain membership for life.
Some cooperatives may have a tendency to grow for the same reasons corporations do. While others, like the housing co-op, inherently resist this trend. If co-ops stay small, how can they compete with national and international corporations? Co-ops of co-ops. A neighbourhood or municipality could create a co-op whose members are all of the co-ops in that area.
I’ll create an example. Let’s say an over-co-op is created on the north side of your town, we’ll call it Northside Community Alliance. The members of NCA include two grocery co-ops, seven housing co-ops, a credit union, a tool library, three neighborhood associations, six local sole proprietorships (including three restaurants, a bar, a coffee shop, and a hardware store), and a smattering of churches. The member organizations all pay dues to the NCA. In return the NCA promotes the member organizations throughout your fair city. Members also enjoy discounts at each other’s establishments.
Those who live in the housing co-ops are more likely to become regulars at the restaurants, coffee shop, bar, & hardware store and members of the credit union, tool library, one of the groceries, & maybe even one of the churches. The tool library will almost certainly buy all of its tools from the hardware store. When any of the member organizations needs to do building maintenance they are more likely to contract to someone living in one of the member neighborhood associations who will in turn buy supplies, like paint, shingles, or nails, from the hardware store, even though said contractor might use tools from the tool library. All of the member organizations are more likely to bank through the credit union. Member organizations would have fliers or coupons for each other near the registers.
As you might imagine, this not only helps every member organization, co-op or otherwise, it also solidifies a sense of community. I think most of us can agree this is something that has lamentably been disappearing in America.
Over-co-ops can also come in the form of nationally or internationally uniting local co-ops that have a common purpose. For example, there might be 13 brewery co-ops across 9 different states all of which are members of a national brewery over-co-op. The over-co-op can then negotiate lower prices for their members from wholesalers.
This structure of individuals associating for their common good and associations associating for their common good mimics America’s founding fathers’ intention of having localities regulate individuals, state governments regulate localities, and national government regulate states.
In summary, we as a society are tired of plutocrats ruling the masses while simultaneously being unable to properly educate ourselves about every political issue. One way we can move forward is to restore power to the people by creating and voluntarily joining co-ops. As a member of a credit union with little interest in financial policies, I usually waive my right to vote on those issues. I trust that those who are more interested vote in every member’s best interest, because all investors are members and vice versa. However, if I were a member of a housing co-op, I’d play a more active role in policy decisions. By choosing to be a member of any of these organizations, I am opting in to their regulations. Take back your power to choose by getting involved in the associations that you feel will most benefit you.
All images sustainably sourced from https://pixabay.com/.
