Co-operative economics
Co-operative economics is a field of economics that incorporates co-operative studies and political economy toward the study and management of co-operatives. History. Depending on how one defines cooperative economics, its history can expand across countries and millennia or can be as narrow as beginning in 19th century Britain. Prior to modern industrial capitalism, many societies operated on principles of pooling resources to satisfy community/tribal need. Labor was also meaningful apart from the profit/wages that it produced, being integrated with religion, culture, recreation, etc. Many forms of pre-capitalist economies can therefore be  thought of as "cooperative" in that they did not revolve around competitive market systems, individual autonomy, and required communal participation. More narrowly, cooperative economics developed as both a theory and a concrete alternative to industrial capitalism in the late 1700s and early 1800s. As such, it was a form of stateless socialism. The term "socialism," in fact, was coined in "The Cooperative Magazine" in 1827"." Such socialisms arose in response to the negative affects of industrialism, where various clergyman, workers, and industrialists in England, such as Robert Owen, experimented with various models of collective farming and community housing with varying  degrees of success. This movement was often integrated with other progressive movements of the era such as women's suffrage and abolitionism.British industrialist Robert Owen (1771-1858) founded a model factory town around his cotton mill and later established a model socialist community, New Harmony, in Indiana. Some proponents of women's rights, such as Emma Martin (1812-1851) in Britain and Flora Tristan (1801-1844) in France, stirred controversy by promoting socialism as the solution to female oppression.Perhaps the most influential event in this growing movement was the establishment of the Rochdale Cooperatives. William King applied a  handful of simple rules to a single firm that proved effective: “no credit; the selection of three people to act as trustees; a weekly accounting of the business; acceptance as members only people that can be trusted; and the very wise advice that meetings be held in a room, not a pub…” King’s model (and variations of it) eventually spread across Europe, and later alongside a burgeoning credit union movement that offered local, decentralized alternatives to state/national banking. While state socialism was growing popular, rising in the early 1900s, followed by collapse in the 20th century, the cooperative  movement grew exponentially in all countries affected by socialism and British colonialism, such as Canada, the U.S., South Africa, and across Europe. Jessica-Gordon Nembhard has produced one of the most thorough academic monographs on cooperative economics entitled "Collective Courage: A History of African American Cooperative Economic Thought and Practice," which looks at how African American communities organized to survive white nationalism, capitalism, and colonialism in the 20th century. The International Cooperative Alliance (ICA) was formed in 1895 and National Cooperative Business Association founded in 1916. The post-WWII era experienced further interest in cooperative economics,abolitionist. academia. The University  of Wisconsin Center for Cooperatives was founded in 1962. In 2000, the Democracy Collaborative was created out of the University of Maryland, which (among other things) facilitates the creation and development of cooperatives. In 2004 the United States Federation of Worker Cooperatives (USFWC) was founded, which, like the ICA, facilitates worker cooperatives (see "Types and Structures of Cooperatives" below). The ongoing success of cooperative economics in providing more effective alternatives to capitalist firms was so significant by the 21st century that the United Nations Assembly ...declared 2012 as the International Year of Cooperatives, highlighting the contribution of cooperatives to socio -economic development, in particular recognizing their impact on poverty reduction, employment generation and social integration.” Jeffrey Sachs, an economist who works with the United Nations, has emphasized the centrality of cooperative models of economics for the future survival of our species; though he pays little attention to actual cooperative enterprises and their development as more sustainable and humane models of production, he nevertheless contends more broadly that humans must “forge a new era of cooperation on a global scale" in order to survive. Contemporary cooperative economics has gained even further popularity since 2012, with numerous TED talks dedicated to the  subject; they demonstrate how cooperative economics is able to solve problems in housing, food, and poverty that modern industrial countries have so far been unable to solve. In 2013, the USFWC spawned the Democracy at Work Institute, a sister organization that also facilitates the growth, creation, and conversion of worker cooperatives. In 2016, the Democracy Collaborative created Fifty by Fifty, another organization which aims to “catalyze a movement with the knowledge, resources, and skills to grow the number of employee owners in the U.S. from 10 million to 50 million American 2050.” Cooperative enterprises continue to spread in various forms  of cooperative grocery stores, physician-owned medical facilities, nurse-owned medical facilities, retail stores, and even worker-owned alternatives to billion dollar shareholder companies. For example, Fairbnb is owned by hosts and serves as an alternative to Airbnb, The Driver's Cooperative is owned by drivers and is an alternative to Uber, Means TV is owned by contributors and is as an alternative to corporate-owned television, etc. Major Figures. Notable theoreticians who have contributed to the field include Robert Owen, Pierre-Joseph Proudhon, Charles Gide, Beatrice and Sydney Webb, J.T.W. Mitchell, Peter Kropotkin, Paul Lambert, Race Mathews, David Griffiths , and G.D.H. Cole. Additional theorists include John Stuart Mill, Laurence Gronlund, Leland Stanford, and modern theoretical work by Benjamin Ward, Jaroslav Vanek, David Ellerman, and Anna Milford and Roger McCain. Additional modern thinkers include Nathan Schneider, Joyce Rothschild, Jessica Gordon Nembhard, Corey Rosen et al., William Foote Whyte, Gar Alperovitz, Seymour Melman, Mario Bunge, Richard D. Wolff and David Schweickart. In Europe, important contributions came from England and Italy, especially from Will Bartlett, Virginie Perotin, Bruno Jossa, Stefano Zamagni, Carlo Borzaga, Jacques Defourny and Tom Winters. Types and Structures of Cooperatives. There are generally four major types of cooperative organizations : Cooperatives may take on different legal structures depending on jurisdiction, such as an LLC, ESOP, 503c non-profit, or a distinctive cooperative legal structure (if the state provides for one, such as Massachusetts) ESOPs (Equity Stock Ownership Plans, where workers own shares for retirement; see, for example, Bob's Redmill) that implement democratic governance are colloquially referred to as "ESOPeratives." The equity structures of cooperatives are therefore various and unlimited. Some implement private/investor equity while others do not. Since the broad purpose of cooperatives is to offer different power structures than ordinary capitalist institutions (which are owned by profit -seekers that may or may not work at the firm), as well as to improve the economic and social life of workers and all who are involved beyond mere profit and creating products/services, there is much internal debate about what is truly "cooperative," "democratic," etc. For example, if a firm is 60% owned by private investors and 40% owned by workers, this would generally not be considered a "worker-cooperative." ESOPs are also not considered cooperatives even if workers own 100% of the firm, because of the usual lack of democratic governance. Co-operative federalism versus co-operative individualism . A major historical debate in co-operative economics has been between co-operative federalism and co-operative individualism. In an Owenite village of cooperation or a commune, the residents would be both the producers and consumers of its products. However, for co-operative enterprise other than communes, the producers and consumers of its products are two different groups of people, and usually only one of these groups is given the status of members (or co-owners). The differences in goals, purpose, and power between worker and consumer cooperatives has led to a debate between those who support consumer co-operatives  (known as the Co-operative Federalists) and those who favor worker co-operatives (pejoratively labelled ‘Individualist' co-operativists by the Federalists ). Co-operative federalism. Co-operative Federalism is the school of thought favouring consumer co-operative societies. Historically, its proponents have included JTW Mitchell and Charles Gide, as well as Paul Lambert and Beatrice Webb. The co-operative federalists argue that consumers should form co-operative wholesale societies (Co-operative Federations in which all members are co-operators, the best historical example of which being CWS in the United Kingdom), and that these co-operative wholesale societies should undertake purchasing  farms or factories. They argue that profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers. Co-operative Individualism. Co-operative Individualism is the school of thought favouring workers' co-operatives. The most notable proponents of workers' co-operatives are, in Britain, the Christian Socialists, and later writers like Joseph Reeves who put this forth as a path to State Socialism. Where the Co-operative Federalists argue for federations in which consumer co-operators federate and receive the monetary dividends, rather, in co-operative wholesale societies  the profits (or surpluses) would be paid as dividends to their workers. The Mondragón Co-operatives in Spain are commonly cited by Co-operative Individualists and a lot of Co-operative Individualist literature deals with these societies. The Mondragón Cooperative Corporation has drawn so much attention because in 2010 it was the seventh-largest company in Spain. It consists of about 250 different worker cooperative businesses. The business model they use includes "extensive integration and solidarity with employees", worker involvement in policy and committees, a "transparent" wage system, and "full practice of democratic control". These two schools of thought are  not necessarily in opposition, and hybrids of the two positions are possible. James Warbasse's work, and more recently Johnston Birchall's, provide perspectives on the breadth of co-operative development nationally and internationally. Benjamin Ward provided a formal treatment to begin an evaluation of "market syndicalism." Jaroslav Vanek wrote a comprehensive work in an attempt to address cooperativism in economic terms and a "labor-managed economy." David Ellerman began by considering legal philosophic aspects of co-operatives, developing the "labor theory of property." In 2007 he used the classical economic premise in formulating his argument deconstructing the myth of  capital rights to ownership. Anna Milford has constructed a detailed theoretical examination of co-operatives in controlled buyer markets (monopsony), and the implications for Fair Trade strategies. Other schools. Socialism and anarchism. Socialists and anarchists, such as anarcho-communists and anarcho-syndicalists, view society as one big cooperative, and feel that goods produced by all should be distributed equitably to all members of the society, not necessarily through a market. All the members of a society are considered to be both producers and consumers. State socialists tend to favor government administration of the economy, while anarchists and libertarian socialists favor  non-governmental coordination, either locally, or through labor unions and worker cooperatives. Although there is some debate as Bakunin and the collectivists favored market distribution using currency, collectivizing production, not consumption. Left libertarians collectivize neither but define their leftness as inalienable rights to the commons, not collective ownership of it, thus rejecting Lockean homesteading. See Centre for a stateless society Utopian socialists feel socialism can be achieved without class struggle and that cooperatives should only include those who voluntarily choose to participate in them. Some participants in the kibbutz movement and other intentional communities fall into this category. Co-operative  commonwealth. In some Co-operative economics literature, the aim is the achievement of a Co-operative Commonwealth; a society based on cooperative and socialist principles. Co-operative economists - Federalist, Individualist, and otherwise - have presented the extension of their economic model to its natural limits as a goal. This ideal was widely supported in early-twentieth century U.S. and Canadian leftist circles. This ideal, and the language behind it, were central to the formation of the Co-operative Commonwealth Federation party in 1932, which became Canada's largest left-wing political party, and continues to this day as the New Democratic  Party. They were also important to the economic principles of the Farmer-Labor Party of the United States, particularly in the FLP's Minnesota affiliate, where advocacy for a Co-operative Commonwealth formed the central theme of the Party's platform from 1934, until the Minnesota FLP merged with the state Democratic Party to form the Democratic–Farmer–Labor Party in 1944. Co-operative Commonwealth ideas were also developed in Great Britain and Ireland from the 1880s by William Morris, which also inspired the guild socialist movement for associative democracy from 1906 right through the 1920s. Guild socialist thinkers included  Bertrand Russell, R.H. Tawney and G.D.H. Cole. Employee ownership. Some economists have argued that economic democracy could be achieved by combining employee ownership on a national scale (including worker cooperatives) within a free market apparatus. Tom Winters argues that "as with the free market more generally, it is not free trade itself that creates inequality, it’s how free trade is used, who benefits from it and who does not." Cooperative microeconomics. According to Hervé Moulin, cooperation from a game-theoretic point of view ("in the economic tradition") is the mutual assistance between egoists. He distinguishes three modes of such  cooperation, which are easily remembered using the (incomplete) motto of the French Revolution: These modes are present in every cooperative institution but their virtues are often logically incompatible.