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January 29, 2012

Biggest Secret in the World Economy

Cooperatives employ more people than multinational companies

There’s more than Olympics and Elections going on in the coming months. 2012 has been named International Year of Cooperatives by the United Nations in recognition of the fact that more than 800 million people around the world belong to one of these economic networks. Coops flourish in all sectors of the economy proving that economic efficiency and equitability can co-exist. They represent a commons-based alternative to both the private market and state controlled enterprises.

Four in ten Canadians are coop members (70 percent in the province of Quebec). In the U.S. 25 percent of the population belongs to at least one coop ranging from credit unions to food coops to major firms like REI and Land O’ Lakes dairy, according to the International Co-Operative Alliance In Belgium, coops account for 20 percent of pharmacies: in Brazil, 37 percent of all agricultural production is from coops; in Singapore, coops account for 55 percent of supermarket purchases: in Bolivia, one credit union handles 25 percent of all savings; in Korea and Japan, 90 percent of farmers belong to coops; in Kenya, coops account for 45 percent of the GDP; in Finland, 34 percent of forestry products, 74 percent of meat and 96 percent of dairy products come from coops.

Around the world, coops provide 100 million jobs, 20 percent more than multinational companies. But what’s most remarkable is how little attention they receive in business coverage or anywhere else. That’s why I am glad thatDavid Bollier, our former On the Commons colleague, highlights the work of Gar Alperovitz, an American champion for democratizing capital, on his blog “Bollier.org”:http://www.bollier.org/

— Jay Walljasper

While a great many commons seek to develop alternatives to conventional businesses – and even to bypass markets altogether – the struggle to democratize capital should not be lost in the shuffle. Popular ownership of capital assets and business enterprises is still a great strategy for building the commons and advancing the public good. Fortunately, there’s a growing enthusiasm for this approach.

One of the most eloquent advocates for socially friendly forms of capital ownership – the French call it the “social economy” – is Gar Alperovitz, a historian and political economist at the University of Maryland and a founder of the Democracy Collaborative. Alperovitz’s book, America Beyond Capitalism, showcased the history and great potential of co-ops, worker-owned companies, and urban land trusts. He also notes the constructive role that is played by municipal utilities, state-owned banks like that in North Dakota and state-chartered trusts such as the Alaska Permanent Fund. There are also dozens of cases in which states use their investment dollars to help communities, use government procurement to help worker-owned businesses, and provide venture capital to startups.

These alternatives to traditional capitalist models are actually flourishing, Alperovitz notes: “We may be moving toward a hybrid system, something different from both traditional capitalism and socialism, without anyone even noticing. Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.”

The great virtue of Alperovtiz’s hybrid “wealth building” models is that they “challenge dominant ideologies which hold that private corporate enterprise offers the only possible way forward; and they help open new ways of conceptualizing practical approaches to meaningful larger scale democratization.”

Alperovitz has focused a lot of his energies on Cleveland, where there are a variety of worker-owned businesses. Perhaps the most notable is the Evergreen Coop, which consists of a “green” institutional laundry, a solar-panel installation coop and hydroponic agriculture businesses. The details of these and other stories add up to a refreshing approach to economic and community development.

So long as the national debate is locked into the old categories of “capitalism” vs. “socialism” — as if they were the only choices, and as if each were a monolithic creature — we will be stuck in a ditch, unable to bring about any systemic change. But if we can begin to see how a diverse array of community-based business models are succeeding, we may just glimpse a productive path forward.

David Bollier, the founding editor of On The Commons, thinks and writes about the commons at Bollier.org , where this post originally appeared under a Creative Commons Attribution license. Bollier’s commons activism is focused on The Commons Law Project and “The Commons Strategy Group”:http://www.bollier.org/commons-law-project