May 19, 2024

Today’s Economist: Nancy Folbre: The Year of the Cooperative

Nancy Folbre, economist at the University of Massachusetts, Amherst.

Nancy Folbre is an economics professor at the University of Massachusetts, Amherst. She recently edited and contributed to “For Love and Money: Care Provision in the United States.

We live in a competitive world. Yet much of our competition is team-based, requiring cooperation among team members. The biologist Edward O. Wilson describes the resulting tensions as a central dilemma facing all social species – humans as well as ants.

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Economists haven’t quite caught up with the implications. Further, they haven’t quite caught on to the reality that cooperative enterprises play an enormously important role in our economic system, one that is likely to grow in decades to come.

Whether set up as worker-owned businesses, consumer memberships, financial institutions or marketing/distribution networks, co-ops pursue more complex goals than maximizing profit. They often put a high priority on democracy, education and the sustainable development of their communities.

Since 1930, cooperative enthusiasts have proclaimed October National Cooperative Month to help publicize their efforts. This year, the United Nations proclaimed the International Year of Cooperatives. The month that begins today promises a grand cooperative convergence, with a number of important events scheduled worldwide.

From Oct. 6 to 11, the city of Quebec will play host to an International Summit of Cooperatives, informally described as the “Davos of the Cooperative Movement,” a reference to the annual gathering of the global elite officially known as the World Economic Forum in Davos, Switzerland.

In 2011, the membership and entrance fee for the Davos meeting was $71,000. Registration for the 2012 International Summit on Cooperatives is $1,300. The conference program reveals a lineup clearly aimed at the international business community. The list of sponsors is topped by the Canadian government and features many big names, including Microsoft, I.B.M., Google, McKinsey, Ernst Young and Deloitte.

The summit Web site challenges the common assumption that co-ops can’t grow out of small neighborhood niches, contending that the 300 largest cooperatives worldwide (including the famous worker-owned Spanish manufacturing concern Mondragon) generate total revenue equal to $1.6 trillion, “an economic power equivalent to the world’s ninth-largest economy in 2008.”

The summit also offers a cooperative leadership training program, particularly significant since most business/management programs give this topic short shrift. The only institution in North America offering a master’s of management specifically for cooperatives and credit unions is St. Mary’s University in Halifax, Nova Scotia.

Cooperative businesses seem to be expanding, perhaps because of disillusionment with more conventional business models and growing interest in a more do-it-yourself economy.

Whether they ever become a significant competitive threat to the Davos elite, cooperatives are likely to remain a mainstay of global food production. The United Nations Food and Agriculture Organization, sponsoring more October celebrations, notes that agricultural cooperatives account for a large share of dairy, coffee and cotton production in several countries.

Even in the United States, known for its huge agribusiness corporations, cooperatives account for 80 percent of dairy production. And they are moving into the ice cream sector.

In 1999, several former Baskin-Robbins franchisees who were cut loose by the parent company decided to form their own franchise operation, the Texas-based KaleidoScoops cooperative. They offer their owner-members relatively low start-up costs along with the opportunity to shape company policy.

I e-mailed them last week to ask how they plan to celebrate National Cooperative Month. Greg Ziolkowski, the president, reported that they are planning a members’ convention in Dallas to go over financials, marketing plans and new ideas.

Cooperatively scooped ice cream seems like an idea that should make both humans and ants very happy. I hope they’ll be scooping some at the international summit.

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